The number of seed rounds in 2014 fell compared to 2013

We definitely found this out the hard way. We tried to raise $750K for a seed round and were repeatedly told that our tech/team were great but that we didn't have enough traction.

It's kinda hard watching people go on about the "bubble" when you're just out there trying to scrap it out and find something that works.

Re: The number of seed rounds in 2014 fell compared to 2013

#5

Post by jacquesm » Sat, Jan 17, 2015, 4:35 AM UTC

k__ wrote: post #3

So bootstrappers are on the rise now?

They never stopped. The number of bootstrappers dwarfs the number of funded companies, they tend to score lower but they score more frequently. They also don't get press unless they're acquired by some company.

Lots of money changing hands (investment, blow-up, acquisition) is what gets you press.

Re: The number of seed rounds in 2014 fell compared to 2013

#6

Post by jacquesm » Sat, Jan 17, 2015, 4:37 AM UTC

This plays right into YCs hands: seed money is harder to get, but YC is still open for business. And with the number of deals they fund the remainder of the seed world is left with what they (incorrectly) perceive as 'second choice', now that the path to YC is well known.

Re: The number of seed rounds in 2014 fell compared to 2013

#7

Post by eudoxus » Sat, Jan 17, 2015, 4:42 AM UTC

That first graph doesn't really show the bursting of a bubble. Yes, the number of rounds have gone down, but I think an important metric is the amount raised, which has only slightly decreased. This make it seems like there have been stricter requirements by seed investors before jumping in.

Which to me sounds like not a bad thing. Ideally we'll get less Yo apps this way.

Re: The number of seed rounds in 2014 fell compared to 2013

#8

Post by jacquesm » Sat, Jan 17, 2015, 4:46 AM UTC

eudoxus wrote: post #7

That first graph doesn't really show the bursting of a bubble. Yes, the number of rounds have gone down, but I think an important metric is the amount raised, which has only slightly decreased. This make it seems like there have been stricter requirements by seed investors before jumping in. Which to me sounds like not a bad thing. Ideally we'll get less Yo apps this way.

If this just affected the Yo apps it would be great news but that does not seem to be the case.

Re: The number of seed rounds in 2014 fell compared to 2013

#9

Post by fivedogit » Sat, Jan 17, 2015, 4:52 AM UTC

jacquesm wrote: post #6

This plays right into YCs hands: seed money is harder to get, but YC is still open for business. And with the number of deals they fund the remainder of the seed world is left with what they (incorrectly) perceive as 'second choice', now that the path to YC is well known.

This is true. I think what we saw was an accelerator bandwagon. It was truly a revolutionary mechanism in the VC world and everybody under the sun wanted in on the action... but there were too many and hardly any of them could replicate the same results as YC and TS. We knew some of them were going to die off and now they have.

I fail to see how anybody but the "me too" accelerators lose with this trend (and they were losing already, obviously). Startup founders shouldn't have been taking money from them anyway, so the fact that they're dying off just saves naive founders from making at least this one mistake.

Re: The number of seed rounds in 2014 fell compared to 2013

#10

Post by beat » Sat, Jan 17, 2015, 4:56 AM UTC

Patrick_Devine wrote: post #4

We definitely found this out the hard way. We tried to raise $750K for a seed round and were repeatedly told that our tech/team were great but that we didn't have enough traction. It's kinda hard watching people go on about the "bubble" when you're just out there trying to scrap it out and find something that works.

I'll probably be looking for seed later this year, so this makes me sad and despondent. I can probably bootstrap to traction, but it's really hard.