Are venture stage names like Series A or Series B useless?
Okay maybe useless is too strong. They definitely denote ๐ด๐ฐ๐ฎ๐ฆ๐ต๐ฉ๐ช๐ฏ๐จ.
But if you look at the distribution of rounds in each stage by a concrete metric like how much capital was raisedโthey are all over the place.
Data below is from 1,900 primary rounds raised in 2024, US startups only. This excludes bridges, extensions, and SAFEs (though if we added SAFEs back in, the seed-stage doesn't change much).
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The earlier stages are more concentrated in specific cash raised brackets. A common assumption like "seed stage rounds raise less than $5 million" is supported by the data.
All the medians make sense but obscure the true variance as you continue through the funding rounds.
Series B, C, and D look like someone is just throwing darts.
What does this mean for founders in the middle of the fundraising rat race?
1. Don't anchor too heavily on the medians. Yes, I can hear you muttering, "Peter you're the one publishing the damn medians" - true! They should serve as starting points, not final statements.
2. Comparison is the death of (startup) joy. Learn from your fellow founders but be wary of over-indexing to their experiences.
3. Raise the capital you think you need plus a little margin for error. Who cares if it's in the bottom half of the distribution?
It would be great if we could define the stages by more concrete metrics around traction, growth, PMF, etc. Those are just not available for the vast majority of startups and we as an ecosystem need ๐ด๐ฐ๐ฎ๐ฆ way to discuss broad trends.
So we're stuck with the alphabet stages for nowโbut if you have a new solution, I'm all ears!
#startups #founders #fundraising #venturecapital
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