Series A rounds are looking a little crunchy in the United States
Earlier this month, TechCrunch argued that startups looking to raise a Series C round were facing a uniquely difficult fundraising threshold. Companies looking to raise this tranche of capital are facing backwash from the public markets. Series Cs can be regarded as the first “late” startup stage. Tech valuations have fallen sharply and IPOs seem to be in decline.
However, data focusing on the U.S. market show that the Series A round looks green for domestic founders. Data from PitchBook (hat tip to Brex’s Shai Goldman) and Redpoint detail a falling pace for Series A rounds in the United States through Q3 2022. Recent data is even worse.
We expect general pressure on startup fundraising during market slowdowns. It’s not a conservative way of disbursing capital. As a result, venture activity drops when rates rise and brighter investments shine brighter.
I’m a journalist who specializes in investigative reporting and writing. I have written for the New York Times and other publications.