Jumbo Series A Rounds Hiding The Real Squeeze On Seed Startups

According to Crunchbase reports from late September, global startups have secured at least 114 Series A rounds valued at $100 million or more during the year, with artificial intelligence companies capturing over 70% of those deals. For the majority of seed founders, however, this trend serves as a cautionary signal.

Crunchbase data indicates that U.S. startups completed 272 Series A rounds in the third quarter, representing a roughly 28% decline from the 377 rounds finalized during the same period the previous year. Seed-stage activity demonstrated more resilience, recording 984 rounds compared to 1,059. Nevertheless, these massive Series A megarounds obscure a severe contraction in the total volume of Series A deals being executed.

Meanwhile, seed financing amounts continue to escalate. Crunchbase notes that the median U.S. seed round reached approximately $3 million last year, tripling its 2018 figure. Despite this, only 24% of businesses that secured a seed investment of $1 million or more in 2023 have advanced beyond the seed stage, while just 16% of the 2024 cohort have done so—a sharp drop from the 55% or higher progression rates seen through 2020.

Size your seed against the Series A

Andy McLoughlin of Uncork Capital shared with Crunchbase News that Series A investors now anticipate annual recurring revenue (ARR) between $2 million and $3 million, and occasionally up to $4 million, while the duration from seed funding to a Series A has extended beyond two years. If a seed capital injection cannot sustain operations to meet that revenue threshold with a six-month buffer, opting for a smaller round represents the wiser strategy.

A larger seed round is not an absolute necessity. Consider Atomic, a New York-based supply chain planning software startup founded in 2023 (which is not an MGV portfolio company). The firm secured a median-sized $3 million seed round in April 2025 with backing from Madrona and DVx Ventures, and subsequently finalized a $12.5 million Series A led by Madrona and Klass Capital approximately 17 months later.

Map your Series A leads now

Venture funds ranging from $100 million to $500 million generally act as Series A lead investors. Entrepreneurs should identify which firms historically lead deals at their specific stage and track when their current funds are scheduled to close, while supplying appropriate partners with regular updates for a full year prior to making any funding requests.

Sell your way to the bar

Because the threshold for a Series A has transformed into a revenue milestone, the challenge is fundamentally a go-to-market issue. Most seed-stage companies encountered possess superior product offerings relative to their sales execution.

At MGV, operations commence with an initial engagement termed Sales Jumpstart, involving interviews with founders and their team members. The startup is then evaluated using a proprietary matrix assessing its current position, target benchmarks, and requirements for evolving into a repeatable go-to-market engine.

Subsequently, founders participate in workshops addressing outbound prospecting, lead qualification, buyer profiling, funnel optimization, handling objections, hiring evaluations, compensation structures, fundraising strategies, pitch deck creation, narrative framing, and investor introductions, accompanied by continuous mentorship.

A company generating $2 million in ARR equipped with a structured sales process that a newly hired employee can execute is a stronger candidate for a Series A than a firm at $3 million in ARR relying entirely on founder-driven deals that cannot be replicated by others. Successful founders are already laying the groundwork for the fundraising round that follows the next one.

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As the co-founder and managing partner of MGV, Marc Schröder is committed to establishing MGV as the premier venture firm for world-class tech entrepreneurs to accelerate their visions. Under Schröder’s stewardship, MGV has swiftly ascended to a top-quartile firm, surpassing the performance of 95% of venture funds. Business Insider has recognized him as one of the Top 100 global seed investors, and his perspectives are published regularly in Crunchbase News and other leading publications.

?Frequently Asked Questions

01Why are giant Series A rounds a warning for seed founders?

Massive megarounds skew overall market perceptions, masking the reality that the total number of Series A deals being completed has significantly dropped, making it much harder for average seed startups to advance.

02What do Series A investors look for in revenue?

Series A investors generally require $2 million to $3 million (and sometimes up to $4 million) in Annual Recurring Revenue (ARR) before committing capital.

03How long does it take to reach a Series A from a seed round?

The timeline from a seed round to a Series A has stretched past two years.

Related Crunchbase query:

• US Seed Funding In 2026

Related reading:

• Seed Funding Is Bigger Than Ever — And Harder To Get
• In Charts: Seed Deals Keep Getting Bigger As Odds Of Reaching Series A Fall Dramatically
• Data: The Seed Funding Boom Is Concentrating Capital In The San Francisco Bay Area
• These Are Sectors Where Seed Rounds Of $5M To $10M Are Clustering This Year
• The Billion-Dollar Seed Isn’t The Deal You Think It Is

Illustration: Dom Guzman