There May Be Light at the Tunnel for Series A Fundraising

Founders — raising your Series A these days will be immensely difficult. But there may be a little fundraising light at the end of the tunnel.

Startups that raised their seed rounds in 2024 are graduating to Series A a bit faster than their counterparts did in 2023. The trend is positive.

But time has almost run out for those that raised their seeds in 2021 and 2022.

𝗖𝗵𝗮𝗿𝘁 𝗘𝘅𝗽𝗹𝗮𝗶𝗻𝗲𝗿

• Each row is a group of companies that raised their seed round in that quarter.

• Each column shows the time elapsed since that seed round.

• Percentages reflect the share of seed companies from that cohort that raised a Series A in that timeframe.

For example: of the startups that raised their seed round in Q1 2021, 32.8% had gone on to raise a Series A in 2 years (Q8 in the columns)

The reduction of green and gold cells, along with the steady march of red and pink into Year 2 and Year 3, make it clear that the boom times of venture fundraising are behind us.

But for the first time in a long time, graduation rates are picking up.

9% of startups that raised their seed in Q2 2024 have gotten to A so far (in just one year). Now 9% doesn't sound like a lot, but it's a hell of a lot better than 3-4%

Optimism!

Now for the gloomy side. So many startups raised frothy rounds in 2021 and early 2022. If they have yet to get to A, the likelihood of them every doing so is diminishing by the day.

We celebrate resilience in founders. But when does scrappy persistence become stubborn refusal to accept reality?

No easy answers, but the data is sadly pretty clear.

#startups #graduationrate #Seed #SeriesA #founders