Series A Rounds Decline. Seed partially filling the void.
Eric Ver Ploeg
Seed Stage Venture Firm — Helping Our Companies Raise Best Possible Series A
US Tech Series A deal pace decreased 46% from October to December. When adjusting for 10-year historical seasonality, we see about a 39% decrease going from October to November on this seasonally adjusted basis. This is a disappointing reversal from the previous month's growth.
Interestingly, Seed rounds are seeing much less of a decline in counts and are actually expanding in size, partially filling the Series A void. The table below compares the first eleven months of 2021 (boom times) with the first eleven months of 2023. Deal counts were down materially for both Seed and Series A rounds, but the total capital invested showed a much smaller decline for Seed rounds than Series A rounds. Taking the ratios we see average Series A round size declined significantly, while Seed round size actually increased.
As in past economic downturns, the Seed/Angel stage venture capital deployment is displaying less procyclical (buy high, sell low) behavior than does later stage venture. It is interesting to see that this is still the case given the more institutionalized nature of Seed/Angel investing when compared with the time of the great financial crisis and the dot com bust.
Really insightful post! ?? As Warren Buffett wisely said - Be fearful when others are greedy and greedy when others are fearful. It's fascinating to see seed investors embodying this wisdom during these fluctuating times. Keep sharing these gems! ?? #inspiration #WarrenBuffett #wisdom
Venture Capital Investor @ Neon | B2B SaaS | ex-AngelList
1 年As impressive as the resilience in Seed round deal volume is, I wonder what the data looks like if we were to exclude the AI startups. And, in a similar vein, curious to see if those same companies will go on to drive a boost in Series A deal count in 2024. In other words, is a resilience in Seed stage activity perhaps a leading indicator of an increase in Series A activity?
CEO, President at Amorphyx Inc.
1 年Eric, have you seen any stats on what percentage of seed rounds raise an A round? A B round? My sense is there's a growing chasm between seed funding and access to growth capital.