Peter Walker's Linkedin Analytics

Founders — it's not just you. Nobody seems to be raising their Series A these days. No matter the industry, no matter the location in the US, the percentage of startups that have made it from their Seed to their Series A in under 2 years has fallen every year since the start of 2021. 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 A in that timeframe. For Example: of the startups that raised their seed round in Q1 2021, 38% had gone on to raise a Series A in 3 years. The reduction of green and gold cells, along with the steady march of red and pink into Year 2 and Year 3, make it very clear: making the jump from Seed to Series A is super difficult right now. 𝗪𝗵𝗮𝘁'𝘀 𝗛𝗮𝗽𝗽𝗲𝗻𝗶𝗻𝗴 • The metrics needed to raise a Series A shifted underneath many of these founders and they've struggled to keep up with the new, higher requirements. • Bridge rounds are happening at higher rates (both priced and SAFEs), but if a large percentage of a fund's portfolio is asking for a bridge - many won't get it.    • This lack of graduation has created a glut of seed-stage companies, which may make Series A investors even more choosy since the supply seems so large.    • "Nice" traction no longer turns heads - it's gotta be stellar traction. Or a repeat founder with successful exits. The AI examples of pure rocketships make for queasy comparisons.    • 𝗢𝗥 𝗺𝗮𝗻𝘆, 𝗺𝗮𝗻𝘆 𝗳𝗼𝘂𝗻𝗱𝗲𝗿𝘀 𝗮𝗿𝗲 𝘁𝗮𝗸𝗶𝗻𝗴 𝗮 𝘀𝗲𝗲𝗱 𝗿𝗼𝘂𝗻𝗱 𝗮𝗻𝗱 𝘁𝗿𝘆𝗶𝗻𝗴 𝘁𝗼 𝗮𝘃𝗼𝗶𝗱 𝗿𝗮𝗶𝘀𝗶𝗻𝗴 𝗮𝗻𝘆 𝗺𝗼𝗿𝗲 𝗰𝗮𝗽𝗶𝘁𝗮𝗹. 𝗜 𝗵𝗼𝗽𝗲 𝘁𝗵𝗶𝘀 𝗶𝘀 𝗮 𝗯𝗶𝗴 𝗽𝗮𝗿𝘁 𝗼𝗳 𝗶𝘁, 𝗯𝘂𝘁 𝗜'𝗺 𝘀𝗸𝗲𝗽𝘁𝗶𝗰𝗮𝗹. Shout out to the founders stuck in this quicksand - staying afloat in this environment is an accomplishment in itself! #Seed #SeriesA #startups #founders #fundraising __________________ Startup data from the pristine alpine lakes, bottled for you every Thursday morning in our Data Minute newsletter. Sign up here: https://lnkd.in/gNa_Dk-F

Founders - if investors are asking for 30% in your seed round, point them to this chart. Less than 10% of software seed rounds in the last 6 months have sold 30% or more. Data covers 904 primary priced rounds raised by US startups on Carta. And that "primary" piece is important - this excludes a lot of little bridge / extension financings. Here's what the market is today: 𝗣𝗿𝗶𝗰𝗲𝗱 𝗦𝗲𝗲𝗱 • Median is 20% sold in this round • Under 10% is more common than over 30% 𝗦𝗲𝗿𝗶𝗲𝘀 𝗔 • 18% is median, slightly down from earlier in 2024 𝗦𝗲𝗿𝗶𝗲𝘀 𝗕 • 15% median, but a pretty wide range under 25% 𝗦𝗲𝗿𝗶𝗲𝘀 𝗖 • Nearly half go for less than 10% sold • 10.5% is the median across all rounds in this stage Now, is this your only term sheet? Do you absolutely need the cash? There are valid reasons to sell 30% sometimes. But "this is market" is not one of them 😁 Caveat: hard tech businesses like biotech, hardware, etc may see higher dilution per round. Share with a fundraising founder! #startups #founders #fundraising #dilution #VC #seed Fresh data out weekly - subscribe to our newsletter at the link in graphic!