What is the venture market looking like today? | Lots of founders have been reaching out recently to discuss the challenges they are facing in raising funds. Because of this, over the past week, I took some time to dig into the data and see just how hard today’s market is. The reality is that we are in the hardest market in a long time. I haven’t seen a lack of funding like we’ve seen in the last 2 years. Here is some data to prove it: | Series A Raises are down | One of the most important signs for the health of a startup ecosystem is the number of companies successfully progressing from Seed to IPO. Today we are seeing the lowest amount of companies raising Series A (as a percentage of those that have raised seed funding in the last 2 years). | Looking specifically as SaaS companies. Those that raised their seed round in 2020 went on to raise a Series A (by 2022) 39% of the time. Today only 13% of those that raised in 2022/23 (within the last 24 month) have raised. This indicated that there is a 66% decline in funding at the Series A stage. This decline is even more pronounced in other sectors. | This trend can also be seen in the jump from Series A to Series B. 42.4% of companies that raised their Series A in Q1 2020 raised their Series B within 24 months. This number drops to just 14.2% of companies that raised their series A in Q1 2023 raising a series B within 24 months. | | Could This Company Do for Housing What Tesla Did for Cars? |
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| | BOXABL believes they have the potential to disrupt a massive and outdated trillion dollar building construction market by bringing assembly line automation to the home industry. | Since securing their initial prototype order from SpaceX and a subsequent project order of 156 homes from the Department of Defense, BOXABL has made substantial strides in streamlining their manufacturing and order process. BOXABL is now delivering to developers and consumers. And they just reserved the ticker symbol BXBL on Nasdaq*
BOXABL has raised over $170M from over 40,000 investors since 2020. They recently achieved a significant milestone: raising over 50% of their Reg A+ funding limit! BOXABL is now only accepting investment on their website until the Reg A+ is full.
Invest now before it’s too late!
Disclosure: This is a paid advertisement for BOXABL’s Regulation A offering. Please read the offering circular here. This is a message from BOXABL
*Reserving a Nasdaq ticker does not guarantee a future listing on Nasdaq or indicate that BOXABL meets any of Nasdaq's listing criteria to do so. |
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| | Startup Hiring is Down | From 2019 to 2022, startups in the US added nearly 900,000 jobs. The only months where startup payrolls declined were April 2020 (pandemic) and December 2022 (the last month in this dataset). If we compare that to 2023 to today, startups have added just 31,000 jobs and have cut workers 12/27 months (Data runs until March 2025). | While some of this may be due to AI, the reality is that startups of all kinds are starting to grow, and even if we can attribute this 100% to AI, it is extremely concerning that employment figured are lagging. This is generally a significant indicator of a recession in a market. | Takeaway | The market is definitely down, and it doesn’t look like it will get better anytime soon. There was hope at the start of the year that an increase in IPOs and liquidity back to LPs would reignite the market. Instead, as the US implements new economic policy with increased uncertainty, companies are delaying or cancelling their IPOs. Meanwhile, many VC firms, adapting to this change and aiming to protect themselves from the long-term impacts of AI are restricting their funds to become more like private equity than traditional venture capital which is also caused them to invest less in early stage companies and instead take bigger sized positions with lower risks in more developed companies. | Given the market condition it is more important than ever that you: | Optimize every aspect of your fundraising process. Every 1% edge you can get matters as funding gets more competitive. Focus on reducing your burn rate to extend your runway. This can mean building more AI tools to increase the efficiency of your company. Prioritize customer needs over investor needs. We are not yet in a recession, customers are still spending and you need their money if you can’t get investor money.
| | Have you been struggling to raise? | | | Learn AI in 5 minutes a day | What’s the secret to staying ahead of the curve in the world of AI? Information. Luckily, you can join 1,000,000+ early adopters reading The Rundown AI — the free newsletter that makes you smarter on AI with just a 5-minute read per day. | Sign up to start learning. | | Are you looking to grow your business? Here is how I can help: | |
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