Founders — it's not just you. Nobody seems to be raising their Series A these days.
No matter the industry, no matter the location in the US, the percentage of startups that have made it from their Seed to their Series A in under 2 years has fallen every year since the start of 2021.
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, 38% had gone on to raise a Series A in 3 years.
The reduction of green and gold cells, along with the steady march of red and pink into Year 2 and Year 3, make it very clear: making the jump from Seed to Series A is super difficult right now.
𝗪𝗵𝗮𝘁'𝘀 𝗛𝗮𝗽𝗽𝗲𝗻𝗶𝗻𝗴
The metrics needed to raise a Series A shifted underneath many of these founders and they've struggled to keep up with the new, higher requirements.
Bridge rounds are happening at higher rates (both priced and SAFEs), but if a large percentage of a fund's portfolio is asking for a bridge - many won't get it.
This lack of graduation has created a glut of seed-stage companies, which may make Series A investors even more choosy since the supply seems so large.
"Nice" traction no longer turns heads - it's gotta be stellar traction. Or a repeat founder with successful exits. The AI examples of pure rocketships make for queasy comparisons.
𝗢𝗥 𝗺𝗮𝗻𝘆, 𝗺𝗮𝗻𝘆 𝗳𝗼𝘂𝗻𝗱𝗲𝗿𝘀 𝗮𝗿𝗲 𝘁𝗮𝗸𝗶𝗻𝗴 𝗮 𝘀𝗲𝗲𝗱 𝗿𝗼𝘂𝗻𝗱 𝗮𝗻𝗱 𝘁𝗿𝘆𝗶𝗻𝗴 𝘁𝗼 𝗮𝘃𝗼𝗶𝗱 𝗿𝗮𝗶𝘀𝗶𝗻𝗴 𝗮𝗻𝘆 𝗺𝗼𝗿𝗲 𝗰𝗮𝗽𝗶𝘁𝗮𝗹. 𝗜 𝗵𝗼𝗽𝗲 𝘁𝗵𝗶𝘀 𝗶𝘀 𝗮 𝗯𝗶𝗴 𝗽𝗮𝗿𝘁 𝗼𝗳 𝗶𝘁, 𝗯𝘂𝘁 𝗜'𝗺 𝘀𝗸𝗲𝗽𝘁𝗶𝗰𝗮𝗹.
Shout out to the founders stuck in this quicksand - staying afloat in this environment is an accomplishment in itself!
#Seed #SeriesA #startups #founders #fundraising
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