Tomasz Tunguz Blog (Theory Ventures) · 2025-07-28
· 311d
The Paradox of Growing Seed Rounds and Shrinking Startups
Seed rounds under $5M have declined from 62.5% of deals in 2015 to 33% in 2024, driven primarily by larger VC funds requiring bigger checks. Despite larger initial funding, startups are actually 20% smaller at Series A today due to productivity gains and AI-enabled efficiency. This shift represents a fundamental change in startup financing dynamics and founder expectations.
Metrics in this report
Cost Adjustment Factor
6.7/5ratio
inflation adjusted
2015 dollars to 2024 dollars
Decline Attribution: Inflation
15%
proportion
of total decline in sub-$5M rounds
Decline Attribution: VC Fundraising
46%
proportion
of total decline in sub-$5M rounds
Series A Company Size Change
-20%
comparison
SaaS companies, H1 2020 to 2024
Sub-$5M Seed Deal Percentage
62.5%
historical
2015 baseline
Sub-$5M Seed Deal Percentage
33%
current
2024
US Venture Capital Fundraising
$42.3B$
annual total
2015
US Venture Capital Fundraising
$81.2B$
annual total
2024