Pumping up the seed stage
Early-stage startups in the U.S. saw their valuations swell last quarter.
Why it matters: The uptick shows that venture firms are much more selective about the startups they back, inflaming competition over the slim roster of companies drawing the most investor interest.
By the numbers: Median pre-money valuations for seed-stage rounds in Q1 jumped to $12.9 million — up 16.9% from the previous quarter and 28.6% year-over-year, per PitchBook.
What's happening: "The selection bar for deals has gone up," PitchBook puts it — echoing an observation we've heard from investors. "[VCs] are writing checks only to companies with strong fundamentals, healthy burn rates, and solid strategies to preserve runway."
Of note: The median time between founding a startup and closing a seed round has lengthened to 3 years in 2023, up from 2.4 years last year.
Be smart: It's a mostly investor-friendly market right now. With founders fighting for capital, venture firms are largely dictating the terms.