Written by: Marc Halpin
“This is a proper correction. The end of a cycle.” “This is clearly not just a speed bump”. “VC’s are going to pull back massively”. WSJ – May 16th 2022
17 years ago today I emigrated from London to Chicago. I gave up French Burgundy and embraced Oregon Pinot. I switched from “sandwiches” to “subs” and my Financial Times subscription was dropped in lieu of the immensely credible Wall Street Journal.
Immensely credible!? Now therein lies a question. We assume that what we read in such a prestigious publication as the WSJ is, well, true. What if I told you that most of what you’ve been reading about the ‘venture capital crash’ this year does not apply to you? What if I told you, as a founder looking to raise seed capital, that taking the headlines at face value is misrepresenting reality?
Stick with me here. If you’re reading this there’s a good chance you’re the founder of an early-stage tech company. If you’ve engaged with Kerosene in any way, there’s also a good chance that you’re raising (or have raised) a series seed round ($2-$10M) of institutional capital.
Now here’s the thing: every quarter Pitchbook releases a report that provides definitive data on the state of the venture capital industry. This includes how much capital has been deployed, how many investments have been made, the average valuation of companies at point of raise, etc.
Mr., Mrs., or Miss Founder I’ve got some good news for you! Here are 4 highlights pertaining to seed stage venture deals based on the most recent actual Q3 data released last week.
- Average Seed Deal Size for Q3 was $3.5M – that’s an all time high.
- Average Seed pre-money valuation for Q3 was $10.5M – another all time high.
- 779 US-based VC micro funds with a seed focus have launched since the beginning of 2021 – all time high.
- US VC dry powder (available cash to invest) currently sits at $290.1B – another all time high.
If you’d like a copy of the report, drop us an email – email@example.com and we’ll send it to you.
(Now OK, if you’re trying to raise a $500M round at a $10B valuation you’re not having any fun! I’m betting a nice bottle of burgundy that no-one with that little problem is reading this article).
Here’s the headline people: I still love my WSJ subscription, but if you’re raising a seed round the party is not over! REPEAT, THE PARTY IS NOT OVER!!