2,052 startups on Carta raised Series A rounds between 2017 and 2021 - and haven't raised another financing since.
These companies are still alive but seemingly in limbo. They probably fall into one of two buckets.
They haven't raised again because they didn't need to. Profitable and growing on their own timelines. Good for the founders, not so much for the VCs.
They are zombies, eking out hiccups of growth while slashing costs and extending runway. Everyone kinda knows it's over but no one wants to be the plug puller.
I chose this 5-year period for a couple reasons. First, it encompasses the bulk of the ZIRP-era (Zero Interest Rate Phenomenon) where funding got progressively easier for early startups.
Second, it ends just before the AI era dawns in mid-2022.
Now could a 2021 Series A startup pivot into the next growth curve and re-ignite momentum in 2025? I'm sure a few will do it.
But the vast majority won't. Which means they need to figure out what the next chapter looks like. Are they attractive acquisition targets for PE shops? Do their tech and talent make sense as a division of a bigger startup? Potentially, but the old saying about startups being bought not sold applies in this case.
More than anything I think this chart shows the absolute grind of founding a VC-backed startup. Shiny fundraises are fun, but 5 years after the TechCrunch headlines the work remains daunting.
Onwards.
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Peter Walker
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