Gross margins and contribution margins provide insights into the underlying economics of the business. At Series A, investors do not necessarily expect margins to be fully optimised, but they do expect clarity on how margins will evolve with scale.

Strong gross margins suggest that the business has room to invest in growth while still moving toward profitability. Weak or deteriorating margins raise questions about cost structure, pricing power or operational efficiency.

Founders should be able to explain what is driving current margins and what levers exist to improve them over time.