Will you make it to Series A depends a whole hell of a lot on when you raised your Seed round. And if that seed-stage raise was in the last few months of 2021 — or the first half of 2022 — you're playing on hard mode. Each line in the chart below represents a set of companies that raised their seed rounds in a specific quarter. So Q2 2020, for instance, is the blue line leading the pack at the top. Y-axis: the percentage of companies from that seed quarter set that made it to a Series A X-axis: number of quarters since the cohort began By placing all the cohorts along the same timeline, patterns become easier to spot. Seed-stage cohorts in 2020 made rapid progress - every single one of the 4 had at least 40% of the underlying startups get to Series A in 3 years or less. Recent cohorts are lagging behind. Only 15% of companies that raised their seeds in Q2 2022 made it to Series A in 2 years, the lowest such percentage in the last 20 quarters. So yes, the macro conditions matter a lot when you look at startup funding success. And yes, this picture makes a pretty good case for startups to get to a place where they control their own destinies through quality revenue and not needing another injection of VC cash. It's just very difficult to build a VC-scale business ($100M ARR +) at VC speeds (5-7 years) without VC money. Doable! But very, very difficult. Hang in there, founders. My suspicion is that funding is going to improve, if only gently, in the back half of this year. Fingers crossed! Give me a shout in the comments if you'd like a high-res version of the core graphic below, without the animations 🙏 #cartadata #seed #SeriesA #fundraising #founders #startups -------------------- Subscribe to our Data Minute newsletter for more data like this. New edition out every Thursday morning - sign up at the link in graphic.
Love it, this is a great chart Peter Walker ... If I were starting a fund today, I would make a Seed + fund, $100k - $1M ARR companies that didn't raise enough, or bootstrapped into MVP and some good customer traction and are trying to cross this chasm into and beyond the A stage.
i bet part of the higher yield in 2018/2019 is running into the frothiness of 2020+, when it was much easier to raise. maybe a return to normal?
Woah is this a gif?
Peter Walker This analysis is 🔥👌 Startup is a game of both chance and skill. Assesing the odds before making a move is crucial and a chart like this makes that bit a good bit easier. Small clarification: it’s cumulative percentage, right? And would love the high res version 🙏
Great insights, Peter Walker! This data really puts the funding landscape into perspective. It's tough out there for recent seed-stage startups, but your analysis gives a glimmer of hope. Love how you've visualized the trends. it makes the patterns so clear. Curious to see if your prediction about funding improving in the latter half of this year comes true. Fingers crossed indeed! Would love to get that high-res graphic if you're sharing. Keep bringing us these valuable data nuggets!
Excellent share, Peter- I would appreciate the high res version please. Connect sent.
Great visual!
Somer Baburek, MBA I find this absolutely fascinating.
Peter Walker this is AMAZING! I love the normalization of the number of Quarters from raising a seed round ❤️ Fascinating to see the tight groupings up until 2021 and the different spreads at Year 1 and Year 2 (from 40% down to 15% 👀) Crazy that the lines don't all start at 0% 🤯
Chief Executive Officer | Tower farming and consulting @ Smart Farms CEO at Meta-Builders - Web3 brand building and Metaverse marketing solutions.
2wI went into business with absolutely ZERO information about funding, equity, revenue etc. I made roughly $400k one year and $20k the next. I thought I'd keep making more year after year but found myself needing funding that I couldn't get. Now here we are year 5 and I'm just now learning about what it takes to actually attract investors at a time where I no longer need them. It seems people only want to give you money if you already have it.