Elevation Capital

I've watched a few really good founders raise big seed rounds this year, then struggle to raise their A, even as the business kept making progress. The seed valuation had set a bar they weren't ready to clear yet. And with everyone excited about the term sheet, it was easy to put off what they'd need to show at the next round. One of them had about as strong a resume as you'll see in AI, and a team to match. Sub-$1M ARR would have been a fine A story at a normal seed price. At theirs it wasn't. (For what it's worth, I write both seed and A checks, so I sit on both sides of this.) The top of the seed market is a bit wild right now. Carta's 95th percentile seed valuation was about $72M in Q2 last year. This Q2 it was $200M. Meanwhile the share of seed companies that get to a Series A within two years has roughly halved since 2018. During a raise almost all the attention goes to how much and at what valuation. The question I wish more founders asked is whether the company is actually set up to hit the growth the next round will expect. If you're planning on a 2-3x step-up at the A, here's what that means. A $25M post means pitching a $50-75M A, which a company with real traction can get to. A $100M post means $200-300M, and at that price the A partner is comparing you to the handful of companies growing faster than almost anyone. The bar right now is brutal. In the A conversations I'm in, a $15M seed (usually a $75-100M post today) means $2M+ ARR, growing 5-6x over the last year, with a believable path to another 5x. None of this means raise less. Before you sign, work backward: what will we need to show at the A, and does this money and ~24 months get us there? If it does and the terms are good, take it. If the honest answer is "only if everything goes right", that's worth knowing now rather than in month 20. A big seed buys you runway and a higher bar. Most founders only count the runway.

When Sajid came back to the Bay Area in 2024, he asked his old hotel friends what had changed since the pandemic. Pretty much nothing. Labor was still expensive, overnight shifts were impossible to staff, and revenue was still going to voicemail. So he built an AI agent for a couple of properties as a favor. Reviews went up at both within 90 days. That became Dextr AI, and today we're announcing their $6.7M seed, led by @ElevCap with our friends at @FoundationCap. At a lot of hotels nobody's at the front desk after hours, and most of the time nobody's there at all. The call rings out, the guest books on an OTA, and the hotel pays a 40% tax on its own traffic. Dextr answers that call. One hotel now books $100-300K a month through Daisy, their voice agent. What stuck with me was owners telling us Dextr changed their life. It's an AI workforce running alongside their team, from reservations to housekeeping, and the owner runs it all over text. Hundreds of properties, zero churn, before raising a dollar. The agents do the work, so they compete for a hotel's labor budget, not its software budget. Hospitality is one of the clearest cases of that I've seen. Welcome to the family, Sajid and Scott. Now please fix my late check-ins. @ElevCap @FoundationCap @mukularora @poorvivijay Dhruv Sanskar Prerna #VerticalAI #AIagents #HotelTech