10 stats defining VC this year, brought to you by Carta

At this year’s Summit, I asked Carta’s Peter Walker to cut through the noise and share this year’s venture markets data. His answer? The rules of the game have changed and they have the data to prove it:

1. Teams are staying leaner for longer

Average full-time, equity-holding headcount is shrinking at every stage. Seed teams have fallen from 6 to 5 employees (-16%), Series A from 20 to 15 (-9%), and Series C from 101 to 79 (-19%). Founders are keeping burn low and hiring sprees at these stages are no longer a status symbol.

2. Fewer companies are making it to Series A

The graduation rate from Seed to Series A has dropped sharply since 2021. Many recent cohorts see sub-15% progression within the first 18 months: a sobering stat for early-stage founders and their investors.

3. The fundraising clock has slowed

The trend of raising a new round every 18 months is fading. Median time from Series A to B is ~2.1 years, and B to C stretches to 2.5 years.

4. ARR bar for Series A has skyrocketed

B2B founders are expected to show far more traction: median ARR has grown from $1.3M in 2021 to $2.9M in 2024, and top quartile ARR has jumped to $6.8M.

5. Bridge rounds are becoming standard practice

Bridge financing isn’t just for distressed companies anymore. In Q1 2025, 46% of Seed rounds were bridges (up from a 35% average since 2020), and Series C bridge rounds jumped to 28%. Even performing companies now need more runway to  get to the higher bar.

6. AI SaaS still commands a valuation premium

At Series A, AI SaaS startups are valued 25% higher than their non-AI peers ($54M vs. $43M). At Seed, the premium is 41% ($18.1M vs. $12.9M).

7. Not all sectors are created equal

Cybersecurity, AI software, and hardware lead both valuation and raise size benchmarks at Seed. Social media remains an outlier, raising large rounds despite macro headwinds.

8. Series A valuations are near record highs

Median pre-money valuation in Q1 2025 reached $49.5M, second only to the 2021 peak. Investors are paying up for companies that clear the higher-traction bar.

9. Seed valuations have never been higher

Despite slower Series A progression, median seed valuations are at an all-time high of $15.6M. This was surprising for investors and founders in the room, but the data backs it up.

10. Capital flows have normalized

The late-2022 spike in venture funding – fueled in part by generative AI’s breakout – has cooled. Capital raised per quarter now hovers around $23B, far below the 2021 peak of nearly $68B.

The takeaway for founders and LPs: This is the “higher bar, longer climb” era. More proof points are required to raise, the path between rounds is longer, and sector dynamics matter more than ever. In practice, that means:

1. Planning for longer fundraising cycles: Median time between rounds now stretches past two years. Runway management is non-negotiable.’
2. Traction is the new currency: With ARR expectations and sector benchmarks higher, hitting milestones before raising isn’t optional.
3. You need to position with purpose: A premium in AI and cybersecurity shows that markets still reward clarity and category strength.

The winners will be those who conserve capital, hit traction milestones, and position themselves in markets where the premium justifies the pace. At Westbound, we help founders understand how the game has changed and help them build with the discipline and category clarity to win in this new era. If this is something you’re navigating, we’d love to chat.