Startup Funding Benchmarks

Coming into 2025, we projected that strong IPO debuts would catalyze larger growth across the entire funding stack, while weak or middling debuts would lead to a "stabilization and slow growth" trend akin to 2024.

Thus far the IPO and M&A market has underperformed and a large amount of economic uncertainty was spurred by the U.S. tariffs, though there are signs of recent improvement.

In this latest update, we have seen small increases across all traction benchmarks, likely due to the increasing demand for founder efficiency and growth from AI. We have also seen a leveling out of team sizes, once again likely due to this increased focus on efficiency.

The "Series A Crunch" that started in 2023 has only grown wider as the supply of seed-stage companies trying to raise A rounds has increased, enabling investors to be picky and operate from a position of great strength. For many seed-stage companies metrics are no longer enough to raise the A - a strong vision and narrative for the future exponential growth of your company is required.

While most cumulative fundraising metrics are flat or dropping across the board, we still see the biggest gap to be the Series A round and not the earlier rounds. We are also seeing a large number of new small/ micro-VC funds ($<20MM fund size) picking up the slack in the pre-seed and seed space that was created when many later stage funds retreated from the early stages.

To successfully fundraise in 2025, entrepreneurs must showcase traction (even pre-revenue startups), capital efficiency, and a strong vision/ narrative for their future growth. Be prepared to pitch to a large number of investors (100-200), using the process as a way to both find investment and improve your pitch.