So if these guys are reliable (?) and if I understand this right, from 2011 to 2012 we saw:
* An increase in preferred stock deals, decrease in convertible note deals. (bad)
* if you started in 2011, 50% of you got a series A. Started 2012 - only 33% (bad)
* this is somewhat offset by doubling of seeded companies getting follow-on seed finance (12% - 23%, almost half of the drop above) (good)
Trends:
- Seed financing is becoming institutionalized (if you see Angellist as an institution)
- Seed deals grew ~400% and Series A grew by 50% (This is the Series A Crunch right there)
- Getting Series A needs traction, apparently traction is not being shown by most companies started in 2012. (v bad)
Also:
There appears to be a difference between software companies and "Internet/Digital media" companies. I am guessing content but frankly how can content be 3/4 of the funded market?
It ignores companies funded with less than 1/4 million - so that may well explain the preponderance of "content" companies.
Summary
Overall I like broad sweep reviews, its my years of Risk playing. But it does not look too good for companies taking finance and hoping to drive into millions more on Series A - and only a review of the sub-250K market is going to tell if the world is drying up, or startups are becoming in the old words "too cheap to meter"
Comments
So if these guys are reliable (?) and if I understand this right, from 2011 to 2012 we saw:
* An increase in preferred stock deals, decrease in convertible note deals. (bad)
* if you started in 2011, 50% of you got a series A. Started 2012 - only 33% (bad)
* this is somewhat offset by doubling of seeded companies getting follow-on seed finance (12% - 23%, almost half of the drop above) (good)
Trends:
- Seed financing is becoming institutionalized (if you see Angellist as an institution)
- Seed deals grew ~400% and Series A grew by 50% (This is the Series A Crunch right there)
- Getting Series A needs traction, apparently traction is not being shown by most companies started in 2012. (v bad)
Also:
There appears to be a difference between software companies and "Internet/Digital media" companies. I am guessing content but frankly how can content be 3/4 of the funded market?
It ignores companies funded with less than 1/4 million - so that may well explain the preponderance of "content" companies.
Summary
Overall I like broad sweep reviews, its my years of Risk playing. But it does not look too good for companies taking finance and hoping to drive into millions more on Series A - and only a review of the sub-250K market is going to tell if the world is drying up, or startups are becoming in the old words "too cheap to meter"
> decrease in convertible note deals
Why is that necessarily bad?
Late reply: bad for start up owners (convertible notes seem to be preferrBle)
They're easier and cheaper for startups.
That is distinctly better than good for them.
I've seen a lot of evidence that they aren't.