* An increase in preferred stock deals, decrease in convertible note deals. (bad)
* if you started in 2011, 50% of you got a series A. Started 2012 - only 33% (bad)
* this is somewhat offset by doubling of seeded companies getting follow-on seed finance (12% - 23%, almost half of the drop above) (good)
Trends:
- Seed financing is becoming institutionalized (if you see Angellist as an institution)
- Seed deals grew ~400% and Series A grew by 50% (This is the Series A Crunch right there)
- Getting Series A needs traction, apparently traction is not being shown by most companies started in 2012. (v bad)
Also:
There appears to be a difference between software companies and "Internet/Digital media" companies. I am guessing content but frankly how can content be 3/4 of the funded market?
It ignores companies funded with less than 1/4 million - so that may well explain the preponderance of "content" companies.
Summary
Overall I like broad sweep reviews, its my years of Risk playing. But it does not look too good for companies taking finance and hoping to drive into millions more on Series A - and only a review of the sub-250K market is going to tell if the world is drying up, or startups are becoming in the old words "too cheap to meter"
Why is that necessarily bad?
It doesn't take into account the percentage of those companies who raised a seed round that were _seeking_ a Series-A round. This looks to me as if the article is making the assumption that 100% of companies who raised a seed round were seeking another around, and thus this year a smaller percentage of seed companies actually raised a round.
It also fails to mention whether or not the size of the average seed round grew. If you use HN and TechCrunch as anecdotal evidence, the trend seems to be much larger seed rounds the last two years. This alone could explain the fact that more companies are not actively seeking a Series-A within the first year.
