The “Series A Crunch” Myth

The “Series A Crunch” Myth from The Startup Garage
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Despite the concerns about a crunch, the reality is that the level of Series A activity is holding steady. At the same time, the number of seed deals have exploded. As a result, the Series A Crunch is nothing more than excessive demand for a limited supply of Series A financing. While the number of startups receiving funding overall declined in 2012, they raised 22% more capital on average and closed 30% faster than in 2011.

According to an analysis published by The Big Data Group and SiSense, the number of Series A deals actually increased in 2012, and those deals closed faster than they did in 2011. However, fewer Series B deals were done in 2012, with 45 more days on average needed to close the deals.Dave The Big Data Group reports, “It’s more of a Series B crunch than a Series A crunch.”

The “Series A Crunch” myth boils down to supply and demand; with a fixed number of Series A investments to go around and a lot more entrepreneurs fighting for them, many will go unfunded.  It’s not that there is less funding (supply), there are just more entrepreneurs (demand), causing those who do not find funding to blame it on a mythical “crunch.”


Whether you have a question about the “Series A Crunch” Myth, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!
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About Tyler Jensen

I work with entrepreneurs who are looking to attract investment and get out of the "Garage". I am passionate about helping entrepreneurs start companies that matter. I helped launch over 100 Companies, Non-Profits and Social Enterprises. I consider myself a serial entrepreneur, startup coach & trusted advisor. * Launching New Companies (For Profit, Non-Profit and Social Enterprise) * Expert Business Plan Writer * Extensive Network of Business Relationships focused on Launch & Rapid Growth of New Companies * Startup, Growth, Marketing, Technology, Web, Business Systems * Trusted Advisor to CEO’s & Entrepreneurs * Capital Raising Strategy Development * Startup Team Development The first company I started and sold is VAVi Sport & Social Club which grew to over 25,000 members in six years, was recognized as San Diego’s 30th fastest growing private company in 2006 by the San Diego Business Journal and 32nd fastest in 2007, and sold for over 25X the capital investment.