If you are building a startup today, it’s likely harder for you to raise money than it was a year ago. New data makes it clear, however, that not every startup stage is feeling the same headwinds.
A lack of uniformity in the startup fundraising climate is not novel. We have seen, variously, a Series A crunch at one point, and a Series B crunch at another. Today, however, we’re seeing something different altogether: A Series C crunch.
This does not mean that all early-stage rounds are in fine shape or that later venture rounds are healthy. Nearly everywhere you look, there are declines in venture activity that founders must contend with. But new data from Carta indicates that Series C is the current, and real, bottleneck in Venture Land, which means that this is the new crunch point for startups looking to raise their next tranche of cash.
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The data point isn’t that surprising. It’s somewhat common wisdom that the later a startup is in its maturity cycle, the more scrutiny it will be under when it seeks more money. With the IPO window closed, public-market valuations in the proverbial latrine, and crossover capital suddenly becoming scarce, late-stage startups are being vetted more like public companies today. And many of them are not ready.