Founders: getting to the next venture stage may take longer than you expect
The median number of days between a priced seed and Series A round hit 679 in 2023, a new peak.
Median for Series A to B was 744 days (over 2 years). Very similar for Series B to C (739 days, also over 2 years).
Fascinating to watch the 25th percentile (green) and the 75th percentile (blue) trends as well. It looks as though the 25th pct has pulled closer to the median for the middle venture rounds - suggesting there are very few companies speed-running through venture fundraising right now.
Some of that could be company choice, as founders have cut spend and become more capital-efficient over the prior 12 months. However, I'm certain a lot of the increase in time is due to VCs being far more choosy about where to invest.
So what are founders doing if primary rounds are not on the menu? Getting creative.
Founders are raising bridge rounds at record rates, usually from insiders already on the cap table. They are turning to SAFEs and Convertible Notes, even between named venture stages. Some are turning to non-dilutive financing and loans.
And many are trying to make customer revenue their primary fundraising channel. But switching from growth at all costs to profitability in a short period of time is no easy track change.
My bet is that the time between rounds plateaus in 2024 (or maybe even declines just a touch). Maybe that's wishful thinking 🙏
New data drops from our 40,000 cap table startups every Thursday morning - head to the URL in graphic to put your name on the list!
#startups #founders #venturecapital #fundraising #cartadata
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