Report: 1,594 US startups received initial VC funding in the first 9 months of 2018, down 40% from 2015, while median seed round was $2M, ~4X the 2013 average
The result is a big increase in the size of some early-stage investments and valuations — It has been a fast ride …
Context & Ripple Effects
This WSJ report captures the moment US venture capital split into a barbell. In the same year PitchBook counted 102 startups raising at least $50M in Q1 alone, only 1,594 companies got a first check — down 40% from 2015 — while the median seed round quadrupled to $2M versus 2013. Money didn't leave early stage; it left most early-stage companies.
The pattern held after 2018: full-year US funding hit its highest level since 2000 in the fewest deals since 2013, and by 2020 a record $130B went out on a shrinking deal count. When the cycle turned, the thin end of the funnel broke first — Series A/B dollars fell 22% YoY in mid-2022 and angel/seed deal counts were down roughly half by Q2 2023.
First-order effects
- Founders seeking a first check face a sharply narrower door: 40% fewer companies got initial funding than in 2015, so the marginal startup is pushed toward angels, accelerators, or bootstrapping instead of institutional seed.
- The startups that do clear the bar raise materially more — a $2M median seed means bigger valuations and more dilution headroom for a select group, effectively moving Series A economics into the seed round.
Second-order effects
- Capital concentrates at the other end of the barbell: with fewer entry points, funds chase proven companies, which is exactly what the record late-stage totals of 2018 and the record 2020 year reflect.
- Seed investing professionalizes around the survivors — larger median checks favor funds that can write them, squeezing sub-$1M-check angels and micro-funds out of lead positions.
Third-order effects
- If the structure holds, US venture becomes a tournament market: a small number of heavily capitalized winners per cohort and a long tail starved of institutional capital, which makes downturns like 2022–2023 cut earliest-stage deal flow disproportionately hard.
- Entry-level entrepreneurship shifts financing burden away from VCs toward non-institutional sources, changing which kinds of companies get built — those that can reach traction without a first institutional check.
The trend: US venture capital is consolidating into fewer, larger checks at both ends of the stage spectrum, a barbell that has persisted from 2018 through the 2022–2023 pullback.