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. As Series Cs can be considered the first “late” startup stage, companies looking to raise the particular tranche appear to be running into backwash from the public markets, where tech valuations have come down sharply and IPOs are moribund at best.
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However, further data focused on the U.S. market indicate that the Series A round is also looking green around the gills for domestic startup 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 more dismal.
Naturally, during a market slowdown, we anticipate general pressure on startup fundraising. It’s hardly a conservative method of disbursing capital, and so when rates rise and duller investments gleam brighter, venture activity dips and no one is shocked.