Taking Stock of the Seed Stage

Four years I set out to correct a long-standing misnomer in how founders and investors talk about startup valuations. Turns out, it was a thornier issue than I realized, and a proper fix required solving a few puzzles first. This is the first of two essays building up to that answer. Here’s the first insight: the population of active Seed-stage startups is shrinking. Not necessarily the funding (in aggregate dollars or the average round size) but rather the number of active Seed companies. Despite the AI boom, exits now outpace new Seed financings, and no one seems to have noticed. Missing data To make that claim, I needed a measure of the total number of seed stage companies that are “alive” at any moment. This is surprisingly difficult to locate, as no one tracks this. This is understandable – companies announce their initial Seed financings, they might publicly celebrate their Series A funding, but they typically don't announce shut downs (ironic, given it's the most common…