The time between investment rounds has increased
Published 6 November 2023
According to new data from Carta, time between primary US venture rounds is getting longer. Key takeaways include:
- The time between primary rounds of venture capital has significantly increased at every stage of the startup lifecycle:
- Startups now take over 2 years to raise a Series A after their priced Seed round.
- 844 days between Series A and Series B rounds.
- 1,090 days between Series B and Series C rounds.
- The gap between primary rounds has lengthened by approximately 20%-30% over the past year, indicating a trend towards extended fundraising timelines.
- Startups facing challenges in raising the next primary round can consider the following strategies:
- Raise a bridge round from current investors at flat valuations or a slight increase, which has become more common in recent quarters.
- Utilize convertible instruments like SAFEs and Convertible Notes between priced rounds to secure additional financing, despite introducing some complexity.
- Implement cost-cutting measures, including scrutinizing software spend, fixed costs, and headcount, to reduce burn rate and conserve cash flow.
- Despite the challenges, the current environment offers opportunities for new startups, although growing existing ones proves to be more demanding.
See the overview here.