Founders - will you make the leap from Series A to Series B?
For a "normal" cohort (say Q2 2018 in the chart below) perhaps 40% of companies that raise a Series A will end up raising a Series B within 3 years.
For those that raised the A in early 2020, things got pretty wild. More than 50% got to the B in 3 years - and 40% did so in just 2 years.
But then the funding cliff hit, interest rates changed, the world flipped, and graduation rates from Series A to Series B starting to decline.
Of startups that raised their Series A in Q1 2022, only about 20% will have made it to Series B in 3 years.
Now it π€π°πΆππ₯ π£π¦ that many Series A companies are choosing not to raise. Maybe they got to profitability and don't need the capital. Maybe their Series A was large and they've spent it wisely. Maybe they raised a little bridge money and are okay building for now.
Maybe, maybe. But for many, they would love a Series B and just can't get there.
I really think the graduation rates for the cohorts from Q2 2022 thru Q3 2023 are just going to be permanently lower. Those founders got caught in a vortex of change.
But I'm hopeful about those 2024 Series As!
#startups #founders #fundraising #SeriesA #SeriesB
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