Raising VC Every 18 Months Is Now a Plan to Fail

Founders, heads up - if you’re planning to raise a VC round every 18 months, you’re planning to fail these days.

Median time between rounds as of the end of 2024:

From Seed to Series A 2.2 years

From Series A to Series B 2.5 years

From Series B to Series C 2.4 years

So what’s happening?

We’ve heard a lot about seed-strapping, where companies raise a seed round and then try to avoid raising more capital (at least until they get to break even and can control their own journey).

But look at the grey bars for the Seed to A column. There are still companies jumping to Series A from seed in 12 months. Super fast.

From A to B, or from B to C, this happens far less often. In fact the 25th percentile for time between rounds is over 18 months for both of those gaps.

So are founders “A-strapping”? Maybe! This moment of capital efficiency has touched startups across the maturity stack.

But let’s be honest this is primarily a chart of companies that are having trouble raising the next round. Outside of some AI hotspots, deal making in VC is in the doldrums.

The overall message for founders is clear: preserve optionality. Paradoxically, the less you need venture capital the more attractive you may become to VCs.

[scheduled post, sorry if I don’t reply to comments - off on vacation in Japan! Still taking recs for Kyoto if you have them]

#startups #fundraising #founders