Low churn, strong NPS, organic growth, inbound demand. Institutional investors want proof that the market is pulling your product, not the other way around.
Product-market fit is the point where your product has found the right market and is genuinely solving a real problem for it. It sounds abstract, but the evidence is concrete. You know you have it when customers keep coming back, churn drops, referrals happen without prompting, and demand starts arriving without you having to push hard for it.
At Series A, you need more than a feeling that this has happened. You need data.
There's no single definitive test for product-market fit, but institutional investors look for a consistent cluster of signals.
Low churn. If customers are staying, the product is working. Monthly churn below 2% for a B2B SaaS product is a strong signal at this stage. If customers are leaving, you don't have product-market fit — you have a product people try and abandon.
High NPS (Net Promoter Score). NPS measures how likely customers are to recommend your product. Above 40 is considered good. Above 60 is strong. The most useful data point is actually the qualitative feedback from detractors — it tells you exactly what still needs to change.
Organic and word-of-mouth growth. When customers start recommending you without being asked, that's a signal the product is solving a real problem. If a meaningful percentage of your new customers come from referrals or word of mouth, note it explicitly. It's one of the most credible indicators of product-market fit.
Inbound demand. When people are finding you without you going to find them — through search, through press, through community — your market is beginning to pull your product. Inbound conversion rates and their source breakdown are worth tracking and presenting.
Survey your active users and ask: "How would you feel if you could no longer use this product?" If more than 40% say "very disappointed," that's a strong indicator of product-market fit. Below 40% and you're still building towards it.
The Sean Ellis test is widely referenced but is one signal, not the whole picture — use it alongside the other indicators above, not instead of them.
Be honest. Investors at Series A will probe this hard. A founder who says "we believe we're approaching product-market fit, and here's the data that gives us conviction — churn is dropping, referrals are up 30% quarter-on-quarter, and our NPS went from 28 to 47 in six months" is making a strong case. A founder who claims strong PMF but can't back it up is a credibility risk.
At seed, investors accept that PMF is still being found. At Series A, they expect it to be found, or to see a very clear trajectory towards it. This is one of the most common reasons Series A raises fall apart — the company has grown revenue but hasn't genuinely locked in the product for its market.
What good looks like: A founder who presents monthly churn below 2%, NPS of 50+, 25% of new customers from referrals, and a Sean Ellis survey where 45% said "very disappointed." Then adds: "We've also turned down feature requests that would have distracted us from the core use case, and retention has improved every quarter." That's a founder who understands what PMF actually means.
Ready to find funding?
Try the funding finder →This is general information, not financial or legal advice. Always do your own research and seek independent professional advice.