What Entro Security Learned Raising Seed vs. Series A: The Product-Market Fit Test

Most founders treat product-market fit like a binary state: you either have it or you don’t. But in a recent episode of Category Visionaries, Itzik Alvas, CEO and Co-Founder of Entro Security, shared a more nuanced view that emerged from raising both seed and Series A funding. His framework reveals that what investors accept as PMF for seed funding looks radically different from what they demand for Series A—and the gap between them is where most startups fail.

The difference, according to Itzik, comes down to one critical question: are all your customers using your product the same way?

What Seed Investors Actually Buy

When Itzik and his co-founder started fundraising for Entro’s seed round, they were selling something fundamentally intangible. “I think it’s very different between the seed and day round,” he explains. “So I think I need to see. You need to mainly sell an idea, but that should be somewhat of a calculated risk.”

The phrase “calculated risk” is doing heavy lifting here. Seed investors aren’t betting on proven traction—they’re betting on founders who’ve done enough validation work to make the idea more than speculation. “You’ve done your market research, you interviewed your customers, you are getting to repetitive circle with your market around the questions that you’re asking them and the answers you are getting from them,” Itzik elaborates.

Notice what qualifies as validation at seed: repetitive patterns in customer conversations. Not revenue. Not usage metrics. Not retention rates. Just consistent feedback loops that suggest you’re onto something real.

“And you need to show that you will be able to reach the $1 million mark with the money you’re asking and kind of proving that, but mostly selling an intangible dream,” Itzik adds. The milestone is clear—$1 million ARR—but the proof is forward-looking. You’re showing a path, not demonstrating arrival.

This distinction matters because it shapes how you prepare for seed fundraising. You don’t need a fully built product or paying customers. You need evidence that the problem is real, repeatable, and that you can articulate a credible path to $1 million with the capital you’re requesting.

The Series A Bar: Where Dreams Meet Reality

The shift from seed to Series A changes everything. “I’m going into the round. It’s different right now,” Itzik states. The differences aren’t subtle—they’re categorical.

“You should have customers, you should have reached the $1 million mark. Your customers should use your product, love your product,” he explains. These requirements seem obvious, but the specificity matters. Not just customers—customers who actually use the product. Not just usage—they should love it. Not just approaching $1 million—you should have reached it.

Each criterion represents a question seed investors deferred. Do people actually use this thing once they buy it? Do they find it valuable enough to renew? Can you actually get to $1 million, or was that seed-stage projection optimistic?

But then Itzik adds something most founders miss: “All of them should use it in the same way, by the way, like if you’re, if each customer is using a different portion of the product, that’s not, not as good as it can be.”

Why Usage Patterns Matter More Than You Think

This insight—that customers must use the product the same way—deserves unpacking because it reveals what product-market fit actually means at scale.

Consider two scenarios. In Scenario A, you have ten customers paying $100k each. Customer one uses features A, B, and C. Customer two uses features D, E, and F. Customer three uses features A, E, and G. Each customer finds value, but they’re extracting it from different parts of your platform.

In Scenario B, you have ten customers paying $100k each, and all ten use features A, B, and C in roughly the same sequence, for the same outcomes, with similar implementation patterns.

Both scenarios generate $1 million ARR. Both have happy customers. But only Scenario B has product-market fit.

Why? Because Scenario A suggests you’ve built a Swiss Army knife—lots of tools serving different use cases. That might work as a services business, but it breaks as a product business. Your sales process differs for each customer type. Your onboarding requires customization. Your marketing can’t target a specific persona because you’re serving multiple personas who want different things. Your product roadmap becomes a negotiation between competing customer segments.

Scenario B, conversely, suggests you’ve found a repeatable motion. You can document a standard sales process because everyone buys for the same reason. You can build a scalable onboarding flow because everyone needs to accomplish the same tasks. You can create targeted marketing because you’re speaking to one persona with one problem. You can prioritize your roadmap based on a coherent use case.

“If you’re, if each customer is using a different portion of the product, that’s not, not as good as it can be,” Itzik reiterates. The understatement masks the severity of the issue. It’s not just “not as good”—it’s a fundamental signal that you haven’t found product-market fit yet.

The Hidden Indicator: What Scattered Usage Actually Reveals

When customers use your product differently, it reveals one of three problems. First, you might be selling to multiple different personas who have different jobs to be done. Second, your product might lack a clear core value proposition, forcing customers to cobble together their own workflows. Third, you might be overfitting to individual customer requests rather than finding the common pattern.

All three problems are fatal at Series A scale. Investors aren’t just looking for revenue—they’re looking for evidence that you can 10x efficiently. Scattered usage patterns suggest that scaling means either building multiple products or providing high-touch services. Neither scales like software.

Itzik’s framework provides a diagnostic: look at your customer usage data. If you see convergence—most customers using the same core features in similar ways—you likely have PMF. If you see divergence—each customer creating their own unique workflow—you have revenue but not a scalable business.

The Implication for Seed-Stage Founders

This creates a challenge for founders between seed and Series A. You need to reach $1 million ARR, but not all revenue is created equal. Closing five $200k deals to companies with completely different use cases gets you to the revenue milestone but fails the usage pattern test.

The solution isn’t to turn down revenue—it’s to be intentional about which customers you pursue. After your first few customers, you should be looking for pattern recognition. Which customers implemented fastest? Which ones found value with minimal customization? Which use cases appear multiple times?

Then double down on that pattern. Your next customers should look like your best customers, not just any customer who’ll pay. This requires saying no to deals that don’t fit the pattern, which feels counterintuitive when you’re trying to reach $1 million. But reaching $1 million the right way creates a foundation for Series A. Reaching $1 million by serving disparate use cases creates a ticking time bomb.

The Framework Applied

Here’s Itzik’s complete framework distilled:

For seed, prove:

• Repetitive patterns in customer problem descriptions
• Clear articulation of the solution
• Credible path to $1 million with the capital requested

For Series A, prove:

• $1 million ARR achieved
• Customers actually use the product consistently
• Customers love the product (retention, expansion, advocacy)
• All customers use the product the same way

That last requirement is the filter that separates genuine PMF from revenue without repeatability. It’s the hardest to achieve and the easiest to rationalize away (“our customers are all different!”), but it’s the most important signal for Series A readiness.

What “It’s Not As Good As It Can Be” Actually Means

When Itzik says scattered usage “is not, not as good as it can be,” he’s being diplomatic. What it actually means is: you’re not ready. You might have revenue, customers, even growth. But you haven’t found the repeatable, scalable motion that venture capital is designed to accelerate.

The good news is this is a solvable problem. It requires ruthless focus on one use case, one persona, one workflow. It requires saying no to customization requests that pull you away from your core. It requires measuring not just whether customers use your product, but whether they use it the same way.

Do that, and you’re building a scalable business. Skip it, and you’re building a consulting firm disguised as a software company—profitable, perhaps, but not venture-scalable.