Carta: VC deals are stalling at seed, with the Series A deal count falling by 79% between Q1 2022 and Q1 2025; 46% of seed deals were bridge rounds in Q1 2025
Top of the Morning — Venture capital's series progression is stalling at seed, according to new data released this morning by Carta.
Context & Ripple Effects
This extends a multiyear contraction in early-stage financing: PitchBook had already recorded an early Series A and B pullback in 2022, followed by a sharp decline in US angel and seed deal activity in 2023. Carta’s figures indicate that the issue is now less the initial financing event than the ability to progress beyond it.
The stalled progression also fits a 2024 market in which limited exits constrained fresh VC activity and Carta reported a rising startup failure rate. Bridge financing appears to be filling the gap between seed rounds and a more durable next-stage raise.
First-order effects
- Seed-stage companies that cannot secure a priced Series A are more likely to rely on bridge rounds, extending existing financing rather than completing a conventional progression to the next round.
- Investors and founders face a more selective Series A market: the reported 79% decline in deal count means fewer companies are receiving that financing step than at the 2022 peak.
Second-order effects
- A greater share of seed capital may be directed toward supporting existing portfolio companies through bridges, potentially reducing capacity for new seed commitments.
- Companies unable to bridge or reach a Series A face increased financing pressure, reinforcing the stress signaled by Carta’s earlier report of elevated startup failures.
Third-order effects
- If the pattern persists, the standard seed-to-Series-A venture pathway could become less predictable, with follow-on support and demonstrated traction carrying more weight than rapid round-to-round advancement.
- The market may increasingly separate startups able to finance an extended seed period from those that cannot, concentrating later-stage capital among a narrower set of companies.
The trend: Venture funding is shifting from broad, staged early-stage progression toward a more selective market in which bridge capital sustains companies between harder-to-win institutional rounds.