---
title: "The Series A Crunch or the Seedpocalypse of 2024"
description: "Explore why Series A funding is tightening in 2024, as seed investments outpace later rounds. Data-driven analysis of startup funding trends and metrics."
categories: ["trends","financing"]
keywords: ["Series A Crunch","Seedpocalypse","venture capital","startup funding trends","SaaS funding","Tomasz Tunguz","Series A funding","seed investments","Theory Ventures","AI startups"]
ai_summary: "Explore the 2024 Series A Crunch, its causes, and implications for startup funding dynamics."
date: 2024-06-21
lastmod: 2026-07-31
canonical_url: https://www.tomtunguz.com/seedpocalypse-2024/
author: "Tomasz Tunguz"
---

2012 was the year of the Seedpocalypse. Also called the Series A Crunch, a fear gripped Startupland : [raising a Series A.](https://tomtunguz.com/data-on-the-seedpocalypse/) Two years later, this indigestible excessive bolus of fundraising rounds hit the Series B market & Series Bs [became the most challenging round to raise.](https://tomtunguz.com/the-hardest-round-to-raise/) 

Whenever there are "too many" of fundraises of one type, the next round becomes the hardest to raise.

In 2024, the [Series A Crunch has returned](https://substack.com/app-link/post?publication_id=8647&post_id=145755011&utm_source=post-email-title). Software companies that have achieved the previous era's milestone, [$1m or more in ARR,](https://x.com/PeterJ_Walker/status/1803098261437501733) face a challenging Series A market. Why is this happening again? 

Just as in 2012, a surge in seed investments met a relatively stable Series A market. The supply/demand imbalance creates a funding squeeze.

![image](https://res.cloudinary.com/dzawgnnlr/image/upload/xfm1evmchnxysduayfzd.png)

The orange crush of seed investment has outpaced the growth in Series A & Series B rounds. Many new seed funds started & the rate of company formation surged during the early 2020s driven by an ebullient capital markets. 

Also, the definition of a Seed round has changed. The Seeds of the 2010 era are the pre-Seeds of today, making the comparison impure.


![image](https://res.cloudinary.com/dzawgnnlr/image/upload/mvvnutaxcxi68zgrkf2q.png)

Regardless, Series As haven't grown to nearly the extent of Seeds. During the last 14 years, the ratio of Seeds to Series As has grown from about 1.1 to 1, to 5 to 1. Meanwhile, the ratio of As to Bs is relatively constant : between 3 & 4 to 1. 

With excess seed supply & in an era where forward public software multiples have reverted to the mean from their stratospheric levels, Series A rounds are harder to raise. AI startups, the darlings of the current era, are a notable exception. In this category, the heady multiples of 2021 & 2022 still apply.

But for classic SaaS companies, the Series A Crunch is real. In 18 months, the Series B will again become the hardest round to raise.