There are few data visualizations I like more than a good cohort chart and fundraising stats are an occupational hazard, so Carta’s seed to series A graduation cohort chart is the perfect content for me.
The chart show the % of startups that had raised a Series A by quarter following their seed raise.
In 2018 and 2019, before the craziness of the Covid times, about 10-14 % of startups had raised a Series A four quarters (one year) after the seed round and about 30 % after eight quarters (two years).
I look at eight quarters as startups traditionally raise about two years of cash. It is worth noting that about 50 % of companies had raised a Series A after 16 quarters (four years). The linear growth during years 3 and 4 surprised me a little.
For startups from 2020 and the first half of 2021 the graduation rates went up to 15-20 % after four quarters and towards 40 % raising a Series A after eight quarters (at least until Q1’21, then it started to drop).
For H2’21 until Q4’24 cohorts graduation rates were in the 4-8.5 % range after four quarters and 13-18 % after eight quarters (basically 50-60 % of 2018-2019 metrics).
While data is early, it seems like the graduation rates are increasing, as both Q1’24 and Q2’24 had 8.9 % graduation rates from seed to series A after four quarters. This is above 2022-2023 and 70-80 % of the 2018-2019 metrics.
It looks like a bottom has formed and that startups from 2024 have a more normal fundraising environment. This makes a lot of sense given the new generation of AI-driven startups that have been founded and raised capital.
