ACQ2 by Acquired Times they are a’changin: Series A is not what it used to be
Jul 29, 2019
Venture capital is undergoing a massive transformation, especially in early-stage funding. The typical Series A fund size has ballooned to between $500M and $1B. Seed funding now looks strikingly similar to Series A, reflecting broader economic shifts. Major players are reshaping investment strategies, blending growth principles with a demand for data. The landscape is ripe with both challenges and opportunities, especially for founders navigating this new environment of higher expectations and evolving vesting schedules.
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Seed is the New A
- Seed is the new Series A, and Series A is the new Series B in today's VC market.
- This shift is backed by extensive data and has significant implications for both founders and investors.
Rise of Super Angels
- The rise of Super Angels and institutional seed funds in the late 2000s/early 2010s played a role in the shift of funding rounds.
- These new investors could write larger checks, increasing seed round sizes and pushing Series A later.
Four Factors Driving the Shift
- Four factors drove the shift in VC: institutionalization of seed, larger Series A rounds, influx of large funds (like Vision Fund), and increased capital flow into private tech.
- These factors created a new landscape where companies raise more rounds and stay private longer.
