The number of early-stage VC rounds worldwide dropped from about 13.3K in 2014 to about 5.9K this year, with mobile app and SaaS startups hit hardest
Amid record amounts of capital raised by VCs worldwide, and a sharp rise in the number of private “unicorns” valued at $1 billion-plus … Tweets: @adamnash , @trengriffin , @gsands , @lutherlowe , @rrhoover , @johnsheehan , @fredwilson , @jbposell , @fdestin , @olafjacobi , and @richardbagdonas Tweets: Adam Nash / @adamnash : These seem like the curves you'd expect if global early-stage VC ramped faster than mid-stage willingness to support / expand. http://techcrunch.com/... Tren Griffin / @trengriffin : Wait! Maybe the ratio of early stage to mid-stage wasn't sustainable! Only ~1,200 US Series A rounds in 2016. http://techcrunch.com/... http://twitter.com/... Greg Sands / @gsands : 1) most of money using the insightful “pile into Unicorns” approach, 2) big firms outgrow early stage, 3) “Johnny Appleseed” only works for apples, 4) real early stage venture capital continues to be great. None of this should surprise anyone. http://techcrunch.com/... Luther Lowe / @lutherlowe : Actually the critics of concentration in the market (particularly Big Tech) have been talking about this for years http://twitter.com/... Ryan Hoover / @rrhoover : “There's an implosion of early-stage VC funding, and no one's talking about it” http://techcrunch.com/... Mobile fueled much of this rise. Now many early stage investors are waiting for the next mainstream platform shift. I'm looking forward to 2018. http://twitter.com/... John Sheehan / @johnsheehan : Mobile I get, but I still see a ton of opportunity for SaaS, especially those built with data compliance requirements in mind from the start (current/last-gen providers have mostly bolted it on). http://twitter.com/... Fred Wilson / @fredwilson : “we believe 2012-16 was a bubble in early-stage funding” http://techcrunch.com/... Jordan Posell / @jbposell : Not seeing this in our business in SoCal and we are heavily-concentrated in early stage. Why?There's an implosion of early-stage VC funding, and no one's talking about it http://tcrn.ch/2Arvt8t via @techcrunch Fred Destin / @fdestin : Sharp drop in seed rounds over last three years - mix of healthy readjustment, focus on winner-take-alls and decreased risk appetite. My take : absence of liquidity hangs heavy over VC sector as a whole. https://techcrunch.com/... Olaf Jacobi / @olafjacobi : the post describes an implosion of early-stage VC funding. BUT there are huge differences country by country. In some overcapitalized countries (e.g. US, UK) VC funding decreased. In other countries (e.g. Germany) VC funding is still increasing http://ow.ly/... #VC Richard Bagdonas / @richardbagdonas : I saw the implosion of early-stage VC firsthand and even wrote about it. Here is additional info from an investor. https://techcrunch.com/...
Context & Ripple Effects
The 2017 data captured a paradox that the following years only sharpened: worldwide early-stage rounds fell from ~13.3K to ~5.9K even as VCs raised record capital and the unicorn count climbed. The Twitter discussion in the piece — Adam Nash on early-stage ramping faster than mid-stage willingness to expand, Tren Griffin on an unsustainable early-to-mid-stage ratio — framed it as a structural mismatch, not a cyclical dip.
Subsequent coverage validated that read. An analysis found 60% of US VC funds raised every year since 2011 were seed funds while non-seed fund formation stayed flat, and the $55B VCs raised in 2018 flowed mostly into growth rounds functioning as private IPOs. By 2021, non-VC funds were taking 42% of deals and PitchBook counted $93B into US seed and early-stage companies — dollars at records, round counts still thinning.
First-order effects
- Mobile app and SaaS founders face a mid-stage market roughly half the size of 2014's by round count, pushing them toward fewer, larger checks or earlier revenue requirements to cross the seed-to-Series-A gap.
- Seed-stage investors sit on a widening portfolio of companies whose next round depends on a mid-stage fund base that Eric Feng's data shows has not grown in 15 years.
Second-order effects
- Growth-stage capital consolidates: the money VCs raise increasingly bypasses the middle entirely, with crossover and non-VC funds competing to write the large checks that function as private IPOs.
- The seed-fund proliferation creates downstream pricing pressure — more seed capital chasing the same thin Series A supply raises valuations at entry while mid-stage terms tighten.
Third-order effects
- The industry barbell-ifies: many small seed funds at one end, a handful of giant growth vehicles at the other, with the traditional Series A/B institutional layer shrinking as a distinct business.
- Companies that clear the seed stage but miss the growth bar stay private longer, feeding the rising unicorn count — the mid-stage gap converts into a population of large, late-stage private companies dependent on non-VC money.
The trend: Venture capital is barbelled — seed fund counts and growth-stage dollars both at records while the mid-stage round count halves — concentrating capital at the ends of the private-company lifecycle.