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Founders are facing challenges in progressing from the seed stage to Series A funding, with a noticeable decrease in graduation rates. This trend is impacting various industries, making it increasingly difficult to secure Series A funding. The drop in Series A graduation rates is expected to have significant implications across the industry, leading to a potential traffic jam in venture-backed companies' progression from Series A to Series B.
Series A traffic jam - many venture-backed A companies are having trouble raising Series B. Only 10% of companies that raised their A in H1 2022 have made it to Series B so far (which is a lot lower than prior years) Traffic jams up and down the venture stack it seems https://t.co/IVZRL2RHuE
I have a few startup investments doing $3-$5M ARR growing 100-400%+ YoY that can’t raise a Series A right now. I remember 5-10yrs ago if you had $1M ARR a Series A term sheet was 100% guaranteed. Yes lots of factors, nuance etc but it’s weird and tough out there.
📊Founders & investors: In 2024, the focus on acquisitions among VC-backed startups is expected to increase, with 42% of emerging managers aligning on this trend. h/t Kauffman https://t.co/CDDA7t4cJB
