Early Stage Deals and Micro-VCs

What do the rise in median angel and seed funding and micro funds mean for new startups?

Key Points:

1. Funding is becoming much more competitive and concentrated within fewer early stage companies. Show traction and market fit early by tracking innovation metrics, leading indicators, and other proof-points that fit your startup.
2. Raise only as much as you need. If you do set a high valuation, consider how that affects your sales, hiring, and ability to raise the next round.
3. The sheer number of seed funds has increased 2400% to around 800 in total since 2003. The funnel for early stage has grown, but stayed the same size for series A and beyond. Funds will be looking for companies that have proven the market via paying customers in the competitive pre-seed space.

The age of companies receiving angel and seed funding is increasing, but the amount they are getting is higher. Early stage median deal size is increasing at the same time that Micro-VC funds are becoming more prevalent. What does this mean for up and coming startups? What are the results of these shifts in the ecosystem? And what changes can we expect in the future?

Photo by Evie S. on Unsplash

Recent PitchBook reports reveal that the median age of companies receiving angel and…