

Q1 2025: The Seed to Series A Gap is Wider Than Ever. Here's what to do. | Peter Walker, Head of Insights at Carta
8 snips May 22, 2025
Peter Walker, Head of Insights at Carta, shares his expertise on the startup funding landscape. He reveals alarming trends, such as the lowest graduation rates from Seed to Series A ever recorded. Walker discusses the rise of bridge rounds and how they can hinder progression to Series A. He emphasizes the importance of understanding data to level the playing field for founders. Additionally, he challenges the notion that moving to the Bay Area is essential for securing large investments, making it clear that adaptability is key for modern entrepreneurs.
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Seed to Series A Graduation Drop
- Graduation rates from Seed to Series A have drastically dropped from about 40% in 2020 to 15% for seeds raised in early 2023.
- This represents a significant challenge for founders aiming to raise Series A funding within two years.
Bridge Rounds Lower Success Odds
- Companies raising bridge rounds have much lower success rates at Series A compared to those that don't.
- Convertible bridge rounds have the lowest graduation rate, around 4%, indicating bridges often signal financial struggles.
Seed Strapping Limits Venture Returns
- Seed strapping can be a smart way to build a business but generally does not deliver venture-scale returns.
- Founders and investors often have misaligned expectations on growth and exit size when seed strapping.