McLoughlin noted that the typical check size his firm writes for a seed round has almost doubled from 18 months ago. \u201cWe\u2019re still trying to buy at least 10% ownership, ideally more, and our average check has grown from $2.5 million or less, to $4.5 million,\u201d he said.<\/p>\n
The speed at which those round sizes have accelerated is mind-bending, he said. \u201cIf you\u2019d asked me 18 months ago, would the $8 million to $10 million-plus seed round become de facto, I would have said you were crazy\u201d<\/p>\n
Series A rounds have also grown in size, per Crunchbase data. Last year, the median U.S. Series A deal was $15 million, with the upper quartile at $25 million and the lower quartile at $7 million. That trend has continued into 2026, with median Series A rounds moving still higher.<\/p>\n<\/p>\n
Longer time frame to Series A<\/p>\n
But while companies that are funded at the seed stage are typically raising larger checks, they\u2019re also taking longer to move on to Series A and face lower odds of graduating to that phase at all, Crunchbase data shows.<\/p>\n
Since 2023, U.S. startups have been taking longer to raise a Series A round following an initial seed round of $1 million and over, per Crunchbase data, with that time frame now stretching to more than two years.<\/p>\n
That continues a general upward trend since 2018 of startups taking longer to raise a Series A round after seed, with notable exceptions in the previous peak funding years of 2021 and 2022, when the timeline shrunk by six months.<\/p>\n<\/p>\n
The threshold for raising a successful Series A is no longer $1 million in annual recurring revenue, said McLoughlin. In the AI era, startups are expected to show $2 million to $3 million \u2014 even $4 million \u2014 in ARR as proof that the business has the momentum to scale, he said.<\/p>\n
\u201cWhen you\u2019re fundraising for your [Series] A, you\u2019re not in competition with the startups you deem to be competitors,\u201d said McLoughlin. Rather, he noted, you\u2019re in competition with every other deal floating around in the venture ecosystem \u2014 not just the partner you\u2019re talking to and their ability to do the deal, but what the entire team is doing, how far along they are, how far ahead of pace they are on their investment cycle, and whether they\u2019re being pushed to only do things that truly look like breakouts.<\/p>\n
Fewer graduates<\/p>\n
Since 2021, drastically fewer companies that raised an initial seed round of $1 million or more have progressed to a later-stage funding or exited, Crunchbase data shows.<\/p>\n
Through 2020, companies that raised a seed round of $1 million-plus had a typical graduate rate of 55% or higher.<\/p>\n
Since then, graduation rates appear to be falling dramatically. Of the companies that raised a $1 million-plus seed round in 2023, only 24% have progressed further, Crunchbase data shows. For the 2024 cohort of seed-funded companies, that\u2019s even lower: just 16%.<\/p>\n
While these cohorts are staying at the seed stage longer, still McLoughlin predicts, \u201cwe\u2019re going to see the mortality rate from seed to A will be much, much higher.\u201d<\/p>\n<\/p>\n
As the dynamics of seed funding change, investors are being forced to rethink their portfolio strategies \u2014 adjusting to the right number of bets, reserving enough capital for follow-on rounds, and deciding whether to invest earlier or in larger seed rounds with potentially less ownership.<\/p>\n
\u201cWe\u2019ve also got to be comfortable with this notion that there will probably be more early outcomes or failures in the portfolio, but if we do our job well, the big outcomes will be bigger than they\u2019ve ever been before,\u201d said McLoughlin.<\/p>\n
Related Crunchbase queries:<\/p>\n
Related reading:<\/p>\n
Clarification: The rates of graduation from seed stage in 2023 and 2024 have been updated.<\/p>\n
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