Which Seed Sectors Do VCs Love or Loathe Right Now

Founders: do seed VCs love or loathe your sector?

Data below is from 1,200+ seed rounds raised by US startups on Carta over that last 12 months.

We excluded all the messy bridges and extensions to get some pristine benchmarks.

𝗖𝗵𝗮𝗿𝘁 𝗘𝘅𝗽𝗹𝗮𝗶𝗻𝗲𝗿

• X-Axis = the median round size for the sector

• Y-Axis = the median pre-money valuation of rounds in the sector

• Bubble Size = total number of rounds

𝗔𝗜 𝗡𝗼𝘁𝗲

AI is involved in every single one of these sectors (well, maybe not so much in DTC Retail yet).

The orange-yellow AI bubble is representative of the median valuation / round size if you treated AI software companies as a separate industry. The size is not quite right (there are more AI companies than that).

𝗢𝘃𝗲𝗿 𝘁𝗵𝗲 𝗽𝗮𝘀𝘁 𝘆𝗲𝗮𝗿, 𝗩𝗖𝘀 𝗹𝗼𝘃𝗲𝗱:

• Cybersecurity (sizable seed rounds at solid valuations)

• Hardware (same thing)

• AI (...duh)

• Social Media (hmmm...kinda surprising?)

• Renewables (cool to see)

𝗢𝘃𝗲𝗿 𝘁𝗵𝗲 𝗽𝗮𝘀𝘁 𝘆𝗲𝗮𝗿, 𝗩𝗖𝘀 𝗱𝗶𝘀𝗹𝗶𝗸𝗲𝗱:

• Edtech (continuing a trend over the past few years)

• Personal Products (not really VC-backable often)

• Med Devices (physical products plus lots of regulatory hurdles)

• Food (tough to break into, tougher to stay relevant)

Candidly, these are pretty pricey valuations. Sure, maybe the increased speed to real revenue for seed-stage companies today justifies the higher prices. I'd say many of these companies are in better financial condition than their counterparts in 2021 who were raising at similar valuations.

Also interesting to watch basically all the industries float along the same invisible line which represents 20% dilution. That's the standard for most seed rounds, although certain industries like Biotech often come with heavier dilution.

Share with your favorite pre-seed / seed founders 🙏

And if you want pre-seed data trends instead, we got you here: https://lnkd.in/gpJkbfUZ

#startups #seed #founders #fundraising