More money is pouring into Series A rounds, but it isn’t opening the door to more startups. U.S. companies have raised $42 billion at that stage this year through October, up roughly 60% year over year, while deal counts remain on pace with the past few years, Crunchbase data shows.
The numbers point to an increasingly divided early-stage market. AI is fueling demand for capital and helping some startups grow at unprecedented speeds, while others struggle to turn their first customers into repeatable sales.
Investors are responding by moving in opposite directions: Some are writing much larger checks at seed to get ahead of the competition, while others are waiting until Series B or beyond for clearer evidence that a business is taking off. (At Series B, too, we’re seeing a similar trend of fewer but larger deals.)
That leaves companies still proving their growth potential navigating a Series A funding crunch even as capital floods into the fastest-growing businesses.
The low point for Series A funding in the past five years was 2023, with $23 billion invested in U.S.-based startups. Series A investment totals each year since have grown, doubling this year compared to 2023.
At the same time, round counts have settled, averaging 1,200 companies funded at Series A at $1 million or more in 2023 through 2025. This year, the trend is holding, with round counts in that range, give or take 100 deals.
“On the application side, it’s a bit harder, and that’s where I think there’s more of a Series A crunch,” according to Siddharth Ramakrishnan, a partner at Scale Venture Partners, which primarily leads Series A and B rounds.
This dynamic — steady deal count despite much more money flowing — is also impacting how early-stage VCs invest.
Go big and early — or wait
Among investors, there’s more competition, especially at the early stage. In turn, VCs are increasingly pursuing one of two opposing strategies: either writing much larger checks much earlier, or holding back until later rounds, Ramakrishnan said.
With the first strategy, check sizes are getting much bigger, he noted, with $10 million to $20 million seed deals not uncommon. “Instead of waiting till the Series A, where they have $4 million in revenue and growing, you’re going to do it when they have $500,000 in revenue, they have a pilot, the team is smart,” he said.
Other investors are waiting to invest later. “ ‘I’m not getting any new information by the time they’re at $2 million in revenue from $500,000, so I’m just going to wait until they actually take off,’ and then you’re seeing a gap,” Ramakrishnan said, explaining the thinking behind this investment approach. “People are putting in a lot of money at the Series B, Series C onwards, because that’s when you get the signal that things are really working.”
Scale expects there to be a bit more variance in this current fund. Its preference is to stay at Series A and B risk profile, by “potentially pulling a little bit earlier and a little bit later and recreating it in the aggregate,” he said.
The firm’s most recent fund 8 is its largest to date at $900 million, up from its prior $600 million fund.
“We still think that Series A is a great place to be if you can make it happen, because it’s at that point where you ideally have enough information to make an informed bet, but not enough that there’s still some of the growth investors that are scared to come in,” Ramakrishnan said, “and so you get great companies at great prices.”
Deals sizes trend higher
At each quartile, U.S. Series A rounds have trended up in size this year, Crunchbase data shows. So far in 2026, 10% of Series A rounds are $75 million and over, up from $50 million in 2025.
Those much-larger checks are translating into hypergrowth for some companies. “Instead of going zero to $7 million, which in the old world would have been amazing numbers, now there’s people going zero to $20 million, or zero to $30 million,” Ramakrishnan said.
Raising a large Series A
For founders, securing those larger checks often hinges on turning a handful of early customers into a repeatable sales process. Many startups get stuck in that transition, even as investors compete to back those that break through.
“If you have the ambition to build a world-class company, then you also need to raise a big Series A to expand and go abroad, take on different types of markets,” according to European seed investor Anke Huiskes of NP-Hard Ventures, whom I interviewed on-stage at the HumanX Amsterdam conference on AI earlier this year.
“I think the whole messy phase is in this go-to-market phase where you don’t really know who your ideal customer profile is,” said Huiskes, who invests at the seed stage in product-focused founders.
She’s seen startups get stuck when they have a few customers but aren’t growing fast enough. “A lot of the companies hang out here,” she said.
But for the companies who build that repetitive sales cycle, VCs are eagerly reaching out, she said: “And then I get a text, ‘Can you please give me an intro?’ And all of a sudden, I have 10 term sheets. So it’s really black and white.”
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Illustration: Dom Guzman
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