If you’re having trouble raising money, it’s not just you. Angel, pre-seed, and seed funding in January fell to the lowest level since before ZIRP, according to a new Crunchbase report.
Those earliest rounds totaled just $2.1 billion in January. This funding slowdown happened even as total venture funding actually increased from December.
What I’m Seeing at Seed Now
I’m seeing deals take a long time to close these days. What might have been sown up in a few weeks is dragging out for several months.
Most investors seem cautious.
They’re more likely to find flaws these days. In 2021, all most people could see were dollar signs.
That said, great companies are still getting funded. It just takes more traction and a lower valuation.
I’m seeing many seed stage companies with over $1 million in revenue growing fast. They would’ve easily raised a Series A in 2021, if not a B.
For me, it’s a great opportunity!
When Does It End?
Venture capital is a lot like recycling. You give a company money, they grow, and hopefully one day they IPO.
Then you get a big bag of cash. You recycle that back into more startups.
“And on it goes, this thing of ours.”
Paulie Gualtieri
But no bags have been coming through lately. We had a couple IPO’s last year, but nothing close to enough.
Once some of the big names like Stripe or Reddit go public, it’ll be a different ballgame.
Investors will start seeing dollar signs again. And they’ll have mountains of cash to put into new startups.
Wrap-Up
Building these companies is never easy. And right now, it’s a lot harder than it normally is.
Customers are cutting budgets. VC’s are standing pat.
In the end, the only thing you can control is you. Just keep building your business the best way you know how.
Sooner or later, the market will figure itself out.
What are you seeing at the early stage these days? Leave a comment and let us know!
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More on tech:
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Seed Valuations Hit All-Time High in 2023
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