A Product Market Fit Show | Startup Podcast for Founders

Why new Carta data shows bridge rounds might be worse than you think. | Peter Walker, Head of Insights at Carta

Feb 13, 2025

Peter Walker, Head of Insights at Carta, dives into the latest Q4 2024 venture capital trends. He reveals that companies raising bridge rounds face significantly lower graduation rates to Series A. The discussion highlights the growing dominance of AI in funding, with larger rounds being directed to fewer companies. Peter also touches on the shifting hiring practices in the startup ecosystem and how these trends impact early-stage founders. If you want to stay on par with VCs, understanding these insights is crucial!

31:17

Episode guests

Peter Walker

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Episode notes

Podcast summary created with Snipd AI

Quick takeaways

Bridge rounds are increasingly common but significantly hinder graduation rates to Series A, with only 4% success, indicating potential wasted capital.

The venture capital landscape is shifting towards larger funding amounts for fewer AI-centric companies, with AI capturing 50% of late-stage capital allocations.

Deep dives

Trends in Fundraising and Valuations

In 2024, venture capital fundraising saw an increase in cash raised, approximately 18% to 20% more than in 2023, despite a 5% decrease in the number of rounds. This trend indicates that larger amounts of capital are being allocated to fewer companies, particularly in the AI sector, which significantly dominates late-stage rounds. While many companies are seeing increasing valuations, the overall fundraising pace has remained stagnant, especially for early-stage ventures. This discrepancy suggests a competitive environment where only a handful of companies, mainly in AI, are thriving, leaving others struggling to secure funding.

Intro

2min

Shifting Dynamics in Venture Capital Funding

14min

Navigating the AI Disruption in Startups

6min

Evolving Dynamics of Venture Capital

4min

Shifting Trends in Early-Stage Venture Funding

3min

Trends in M&A and the Anticipation of IPOs

2min

Carta just released their report for Q4 2024. Peter is Head of Insights at Carta, and the person who owns their data practice. We sit down to talk about the largest trends he saw across fundraising, industries, graduation rates and even hiring practices.

Carta data shows that graduation rates from Seed to A are much lower for companies that have raised a bridge round. We analyze why that might be and what that could mean for early-stage founders.

VCs read and understand all this data. If you want to operate on equal footing— you should too.

Why you should listen:

The role of AI in the venture capital landscape.
Why there are a trend of larger funding rounds going to fewer companies.
Why so much capital is being allocated to AI companies.
Valuations for seed and early-stage companies are on the rise.
Why bridges and extensions have become so popular.
Why bridge rounds have lower graduation rates to Series A.
What the data shows about how hiring practices are changing.

Keywords
venture capital, AI, fundraising, market trends, valuations, startup ecosystem, early stage, late stage, investment, venture capital, bridge rounds, seed extensions, startup growth, hiring practices, AI impact, early stage funding, market trends, valuations, exits

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