VC Minute – quick advice to help startup founders fundraise better.
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This is Rich Maloy with SpringTime Ventures, bringing you the VC Minute, quick advice to help startup founders fundraise better.
If you’ve opened up LinkedIn at any point in the last nine months, you’ve undoubtedly seen the work of this week’s guest.
Peter Walker has transformed the mountains of data at his fingertips into helpful charts nearly every day for the past year. What I love is that he shines a light into dark places. With his insight, he brings transparency to the unnecessarily opaque world of seed-stage ventures. He’s the man with the visuals. Please welcome, Peter Chart.
Great to be here. My name is Peter Walker, and I am the head of Insights at Carta.
Carta is an equity management platform that manages the cap table for about 37,000 startups in the US and across the world. And we’ve got a whole host of other businesses, including a major one that runs the back office for about 3,000 venture funds. So, we’re deeply tied into the startup ecosystem.
My role at Carta is to make all of the data that we have access to through those cap table integrations more useful to the ecosystem at large. That means putting out reports to founders, investors, and employees. We do daily social graphics from our data set out to the ecosystem and just generally being helpful.
This is a wonderful chance to talk to some founders about different things that Carta knows about the current state of fundraising and maybe a couple tips and tricks along the way to get started.
How long does it take to raise a child in this environment? You see that startups on Carta are taking a bit longer to raise than they used to.
When people talk about fundraising, they can mean either one, the time between a seed round and a series A round, measured in months or years. Or they can say the time that a founder is actively going out and talking to venture capitalists. So those are the two kinds of fundraising timelines that you see.
On the first one, just the time between named rounds that has really started to lengthen over the last six to nine months. So, if you go from a seed round to a series A round in Q1 of 2022, the average time, was about two years, 24 months. If you look at it now, it’s closer to 2.4 years. You can see that’s about a 20–25% jump over the last nine months in terms of time.
And that just means that, founders, whatever you think it’s going to take you to raise this funding, it’s probably going to take longer. So, begin those conversations earlier than you think you need to. The last thing you want to do is to have to go back to your seed investors and say, hey, I didn’t time this fundraising correctly and we only have four months of runway left. Can you bridge me to the next round? Those are really difficult conversations if you’re not having them early on.
Carta builds infrastructure for tomorrow’s innovators. Founders can manage their equity, issue options, and pay fairly using Carta Cap Table and Compensation tools. You can get a weekly peek into data from 38,000 startups across the world by subscribing to our Data Minute newsletter.
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