Venture capital is stalling at seed
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Aïda Amer/Axios
Venture capital's series progression is stalling at seed, according to new Carta data.
By the numbers: 46% of all seed deals were bridge rounds in Q1 2025, which is the highest bridge rate for any stage since Carta has been tracking such data.
- The rate was 39% for full-year 2024 and just 31% in 2022.
Behind the scenes: One interpretation is that market volatility is having downstream impacts, with startups delaying new priced rounds until they have more valuation certainty.
- Another is that this is less about supply than demand — or the so-called "Series A crunch."
- Most of that is driven by post-2022 VC fundraising difficulties, save for a small number of successful firms who've raised large funds that encourage later-stage checkwriting.
- Series A deal count fell 79% between Q1 2022 and Q1 2025, per Carta.
Why it matters: Startups staying in seed can alter ROI expectations up the stack, assuming that they eventually graduate to letter rounds.
- That's not necessarily a problem for founders or early employees, but definitely changes the math for LPs investing in Series A or Series B-focused funds.
Other Carta findings: Median founder dilution fell from seed-stage through Series D, while the median time between Series A and Series B rounds hit an all-time high of 2.8 years.
- Instances of participating preferred shares rose sharply, reflecting investor demand for greater protections.
The bottom line: Venture capital drove too fast during the ZIRP era, causing its gears to become creaky.
