November 27, 2022

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Series C is the new bottleneck for venture startups • Eureka News Now

1 min read

If you’re building a startup today, you’re probably going to have a harder time raising money than it was a year ago. However, new data makes it clear that not every startup phase faces the same headwinds.

A lack of consistency in the startup fundraising climate isn’t new. We have variously seen a Series A crunch at one point and a Series B crunch at another. Today, however, we’re seeing something completely different: a C-crunch.

This does not mean that all early rounds are in good shape or that later venture rounds are healthy. Almost everywhere you look there are downturns in venture activity that founders are struggling with. However, new data from Carta suggests that Series C is the current and real bottleneck in venture land, meaning this is the new sticking point for startups looking to raise their next tranche of cash.

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The data point is not that surprising. It’s a well-known fact that the later a startup is in its maturity cycle, the more scrutinized it is when looking for more money. With the IPO window closed, public market valuations in the proverbial latrine, and crossover capital suddenly tight, late-stage startups are now being scrutinized more like public companies. And many of them are not ready yet.

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