From YC to Series A: Building Enterprise Software for Pharma
When we raised money for Realm (YC S11), the playbook was clear: show hockey-stick growth in developer adoption, demonstrate network effects, paint a vision of becoming the default database for mobile. We raised over $40 million from top-tier VCs like Khosla Ventures and Scale Venture Partners.
When I started Cohera, I assumed I could run the same playbook. I was wrong.
Fundraising for enterprise software in regulated industries requires a completely different approach. Here's what I learned.
The Consumer/B2B Playbook Doesn't Translate
The standard Silicon Valley fundraising narrative goes:
- Show rapid growth (users, revenue, engagement)
- Demonstrate product-market fit through retention
- Paint a vision of a massive market
- Show a clear path to becoming category leader
This works for consumer products, developer tools, and horizontal B2B software. It doesn't work for pharmaceutical enterprise software.
Why?
Growth is slow by design. Enterprise pharma sales cycles are 6-18 months. You can't show hockey-stick growth because customers don't move that fast. Expecting ARR to 3x every year is unrealistic.
Markets look small. "Pharmaceutical compliance software" sounds like a niche. VCs pattern-match to massive TAMs. When you say your target market is 500 companies, their eyes glaze over.
Product-market fit takes longer to prove. You need customers who've been using your product for 6+ months through actual audits. That validation takes time you might not have between seed and Series A.
The competitive landscape is different. You're not racing other startups—you're competing against entrenched incumbents (Veeva, TrackWise, SAP) who've been serving these customers for decades.
What Worked for Our Series A
We raised our Series A with a different narrative:
Moats over growth. Instead of showing revenue growth, we emphasized the moats we were building:
- Compliance certifications (SOC 2 Type II, ISO 27001)
- Validation packages that customers rely on
- Domain expertise that takes years to build
- Integration work that competitors would need to replicate
Revenue quality over revenue quantity. We showed:
- Customer retention approaching 100%
- Expansion within accounts
- Multi-year contracts
- High NPS scores
A $1M ARR business with 100% retention and 130% net revenue retention is more valuable than a $3M ARR business with 85% retention and churn.
Customer depth over customer breadth. Rather than counting logos, we showed how deeply embedded we were becoming in customer operations. Which processes depended on us? What would switching cost? How were we becoming system of record?
The wedge strategy. We explained how our initial product (BioWise for supplier compliance) was a wedge into larger opportunities. Once you're processing certificates, customers want you to handle related workflows. Once you're integrated with their systems, expanding use cases is natural.
Market education. Many VCs don't understand pharmaceutical operations. We spent time explaining:
- Why pharma companies run disconnected systems
- What compliance actually means in this context
- How large the operational spend is on quality activities
- Why incumbents are vulnerable to modern approaches
Finding the Right Investors
Not every VC is right for enterprise pharma software. We looked for:
Patience. Investors who understood that 18-month sales cycles aren't a bug—they're the nature of the market. We needed partners who wouldn't push for shortcuts that damage long-term customer relationships.
Enterprise experience. VCs who've backed enterprise software before understand customer concentration, long sales cycles, and the value of moats over growth.
Healthcare/life sciences knowledge. Some investors have portfolio companies in adjacent spaces and understand regulated industries. This domain knowledge makes conversations easier.
Stage-appropriate capital. We didn't need $50M to execute our plan. Over-raising creates pressure for growth that the market can't support. We raised what we needed for a 24-month runway with clear milestones.
International orientation. Pharmaceutical is a global industry. European customers are as important as US customers. We needed investors comfortable with our Copenhagen + San Francisco presence.
The Pitch That Worked
Here's the structure that resonated:
1. The problem (with specificity)
Not "pharmaceutical companies have data problems" but "when a supplier sends a certificate of analysis, quality managers manually enter data into 3-4 systems, taking 30 minutes per certificate. A large pharma company processes thousands of certificates per year."
Specific, quantified problems land better than vague market descriptions.
2. The insight (why now)
Several things are converging:
- Cloud acceptance in pharma (finally)
- AI capabilities for document processing
- Frustration with legacy system vendors
- Pressure to do more with less in quality operations
This explains why Cohera can succeed where others haven't.
3. The solution (with differentiation)
We explained the integration layer approach—why we don't try to replace Veeva and SAP, but connect them. This differentiation matters because investors hear "we're building a quality management system" and assume we're competing head-to-head with TrackWise.
4. The traction (with context)
We showed customer metrics, but framed them appropriately:
- "In pharma, a 6-month pilot leading to a 3-year contract is fast"
- "This customer expansion from 1 site to 5 sites happened in 9 months"
- "Our pipeline includes 4 of the top 20 pharma companies"
5. The team (with domain credibility)
Investors bet on teams. We emphasized:
- Prior startup experience (Realm exit)
- Domain expertise (team members from pharma)
- Technical depth (architecture for compliance)
6. The ask (with clarity)
Clear use of funds:
- Engineering (product development)
- Go-to-market (sales expansion)
- Compliance (additional certifications)
Specific milestones:
- Revenue targets
- Customer acquisition targets
- Product development milestones
Mistakes We Made
Initially pitched like a typical SaaS company. Early meetings, we focused on ARR growth and market size. This didn't resonate. When we switched to emphasizing moats and customer quality, conversations improved.
Underestimated domain knowledge gap. We assumed VCs understood pharmaceutical operations. They didn't. We needed to spend more time on market education.
Didn't leverage customers enough. Customer references are gold in enterprise software. We should have lined up reference calls earlier in the process.
Tried to fit standard metrics. Forcing our business into standard SaaS metrics (CAC/LTV, Rule of 40) didn't work because our dynamics are different. We eventually created our own metrics that better captured our business quality.
Advice for Founders in Regulated Industries
If you're raising for enterprise software in regulated industries:
Lead with the moat. Compliance certifications, validation packages, integration work—these are barriers that protect your business. Make them central to your pitch.
Find specialist investors. Healthcare, life sciences, vertical SaaS—there are investors who understand these markets. Target them specifically.
Be honest about timelines. Don't promise growth rates that the market can't support. Sophisticated investors appreciate realistic projections.
Show customer depth. Contract length, expansion, retention—these metrics matter more than customer count in enterprise markets.
Bring customers to the conversation. Nothing sells like a happy customer explaining why they chose you over incumbents.
Educate patiently. You'll explain pharmaceutical operations many times. Prepare clear, concise explanations.
The Outcome
We raised our Series A from investors who understand enterprise software in regulated industries. More importantly, they're partners who won't pressure us for growth that damages customer relationships or compromises compliance.
That alignment matters more than the check size. In a market where sales cycles are long and customer relationships are everything, having patient investors is essential.
The path from Y Combinator-style growth companies to enterprise pharma software was longer than I expected. But the lessons from Realm—understanding customer needs, building reliable technology, creating durable value—translated perfectly.
What changed was the pace and the metrics. What stayed the same was the fundamentals.