Seed round inflation and Series A crunch
Key Questions
What is the current median size of seed rounds and how has it changed?
Median seed rounds have reached $3M, tripling since 2018. This inflation is reflected in recent raises such as Harry Howard AI's $3M round and Luel's $31M seed.
What is the Series A graduation rate for the 2024 cohort?
The Series A graduation rate has dropped to 24% for the 2024 cohort. This signals higher startup mortality and requires founders to show more traction before advancing.
How are investors adjusting their seed check sizes and requirements?
McLoughlin is doubling checks to $4.5M while setting ARR thresholds at $2-4M. Founders must demonstrate stronger metrics amid tighter funding conditions.
What trends are occurring in venture debt?
Venture debt has surged to $69B, up 12% year-over-year. The market is diversifying beyond SaaS into additional sectors.
How do recent seed rounds illustrate the current funding landscape?
Examples include Kopa.ai raising €2M and Luel securing $31M from General Catalyst, Lightspeed, and Y Combinator. These deals highlight both inflated valuations and selective investor activity amid the Series A crunch.
Median seed rounds hit $3M (3x from 2018), Series A graduation rate drops to 24% for 2024 cohort; McLoughlin doubling check to $4.5M, ARR thresholds $2-4M. Founders need more traction, higher mortality. Venture debt surges to $69B (up 12%, diversifying beyond SaaS).