What Percent of Seed Startups Make It All the Way to Series B

What percent of seed-stage startups make it to Series B?

In the frothiest possible market: ~32%.

In the chaos of the last few years: maybe ~15%.

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 B in that timeframe.

• Most (but not all!) of these companies raised a Series A in the intervening years.

𝗦𝘁𝘂𝗳𝗳 𝘁𝗵𝗮𝘁 𝘀𝘁𝗮𝗻𝗱𝘀 𝗼𝘂𝘁 𝘁𝗼 𝗺𝗲

1. Even in the best times, the company that goes seed to A and then A to B in 4 years (you know, 2 years each between rounds in the neat and tidy VC assumption game) is rare. Only 22% or so in the boom years and less than 10% these days.

2. This analysis assumes all these companies were 𝘁𝗿𝘆𝗶𝗻𝗴 to get to a B round. Probably a less-true assumption for more recent cohorts, but not by much.

3. M&A plays a minor role. Something on the order of 5-6% of the initial seed cohort will have been acquired before the B round.

4. This is freaking hard!

5. Many of the "best" seeds will wander for years before breaking into the growth stages of VC, if they do so at all. Most seed investors are humble enough to tell you that the breakouts from their portfolios are rarely the most obvious ones.

6. Founders should expect this is going to take longer than expected. Does that mean raise more cash? Potentially. Could it mean try for profitability earlier than anticipated? Potentially.

7. Venture is such a long-term game. 6 years beyond the seed round and 20%-23% of companies have hit the B...and there's much more to do beyond the B. Kinda wild anyone does this, honestly.

Big respect to the founders making it happen over a holiday weekend (and to the early investors who back them).

#Seed #SeriesA #SeriesB #founders