The money is flowing into Series A rounds, but it isn't reaching more startups. U.S. companies have raised $42 billion at that stage through October, up roughly 60% from a year earlier. Deal counts, meanwhile, are tracking the pace of the past few years. Crunchbase data shows the gap clearly.
My read is that the early-stage market is splitting in two. AI is pulling in capital and letting some startups scale at a speed the industry hasn't seen before. Plenty of others can land their first customers but can't turn them into repeatable sales.
Investors have picked opposite strategies. Some are writing much bigger checks at seed to beat rivals to promising companies. Others are waiting until Series B or later for hard proof that a business is taking off. Series B shows a similar pattern, with fewer deals and larger tickets.
That leaves companies still trying to prove their growth stuck in a Series A crunch, even as capital piles into the fastest-growing businesses.
Series A totals hit bottom in 2023, when U.S. startups raised $23 billion at that stage. That was the low point of the past five years. Totals have climbed every year since, and 2026 is running at nearly double the 2023 level.
Round counts tell a different story. Between 2023 and 2025, an average of 1,200 companies a year raised Series A rounds of $1 million or more. This year is tracking close to that number, 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," said Siddharth Ramakrishnan, a partner at Scale Venture Partners, a firm that leads mostly Series A and B rounds.
Flat deal counts alongside surging dollars are changing how early-stage VCs invest.
Go big early, or wait
Competition for deals is fiercer at the early stage. As a result, VCs are gravitating toward one of two approaches: writing much larger checks far sooner, or holding off until later rounds, Ramakrishnan said.
On the first approach, check sizes are climbing fast. Seed deals of $10 million to $20 million aren't unusual. "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.
The second camp is betting on certainty. "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," Ramakrishnan said, describing that logic. "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 more variation in its current fund. The firm still wants to stay in a Series A and B risk profile, and it will move a little earlier and a little later to get there on average, he said.
Scale's latest fund, its eighth, is its largest yet at $900 million, up from $600 million for its predecessor.
"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."
Round sizes keep climbing
Series A rounds have grown across every quartile this year, according to Crunchbase data. So far in 2026, the top 10% of Series A rounds start at $75 million, up from $50 million in 2025.
Those bigger checks are producing rapid growth at 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, the big checks usually depend on converting a handful of early customers into a sales process that repeats. Many startups stall in that transition, even as investors compete for the ones that get 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," said European seed investor Anke Huiskes of NP-Hard Ventures. She spoke on stage at the HumanX Amsterdam AI conference 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 seed in product-focused founders.
She sees 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.
Once a company builds a repeatable sales motion, though, the VC interest arrives quickly. "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," she said.
Illustration: Dom Guzman
