Seed Explosion and Steady A Volume

The "Series A crunch" started to echo well over 2 years ago. The thought was so much seed funding being deployed would surely create it as A funds ran thin, but that wasn't the case. LP capital has been strong over the past several quarters and even more capital is being deployed at the A round, but to a relatively unchanged amount of companies when compared to overall seed deals.

This isn't a crunch-- it's an explosion at the Seed. Check out this post from Manu Kumar that dives a bit deeper into this. I also put a small anecdote down about it in February.

A lot of founders that raised seed funding for the first time in the past ~2 years have seen a unique landscape of plentiful investors that continued to grow in number. Micro VCs became even more common, crowdfunding opened up new capital alongside a strong run in the public markets, syndicates increased crowdfunding confidence, and bridge rounds (read: Second Seed) became the norm. These bridge rounds also feel like a Series A buffer and a bit more runway to make it happen, bloating the seed stage even further.

I think it's important to state the fact that growth outweighs all other factors to help you reach the next round of funding, even if it's a bridge. Of course, you'll have to prove even more growth to reach the A. There have been plenty of companies that were in build-mode, finding the right customer segment, whatever, for 12-24 months that finally launched into a growth spurt to hit an obvious Seed or A round 2 years after starting. This came with a repeatable sales model and technology that seems scaleable alongside growth. Raise from a position of undeniable growth, not soft assumptions that look promising.