3 ms·

Survival of the fittest! It's applicable for everything. Edit: Btw, I've heard follow on venture rounds (A, B, C etc.) get harder and harder on an exponential

• nostrademons 14y ago
  Possibly because it's quite possible to have a successful exit or profitable business with only a Series A (Google did it...), but hard to reach that milestone on seed/angel funding alone, unless you're bootstrapping entirely in which case you don't care about funding. The reason follow-on rounds get harder is because there are exponentially fewer markets where it's rational for investors to put money in at that valuation. If you take a $5M Series A that values the company at $20M or so, then a $50M acquisition is still a win for everyone. If you take a $50M Series B that values the company at $300M, you better be a billion-dollar business. If you take an $800M Series F, either you're the next Google or a bunch of investors are about to lose their shirts. The Series A crunch gets publicity because it means that a bunch of founders are presumably either going to fail or will get talent-acquired for not-quite-FU-money. The Series B crunch just means that a lot of companies are getting acquired for FU money for the founders and a down payment on a house for the employees.