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Seed to Series A: Readiness Benchmarks

Graduation rates from seed to Series A have roughly halved since 2020. What the cohort data shows, and how to read it without despair.

Key findings

  • Recent cohorts show roughly 15–20% reaching Series A within about two years.
  • At the 2020 peak, close to 40% of seed companies graduated within two years.
  • Carta data shows 24% of 2023 $1m+ seed rounds progressed further, against 16% of the 2024 cohort.
  • The 2024 quarterly cohorts sit above 2022–23 lows, suggesting stabilisation rather than continued decline.

The shape of the decline

Graduation rate — the share of seed-funded companies that raise a Series A within a defined window — is the cleanest available measure of how hard the next round is. It has moved a long way.

In 2018, roughly 25–30% of seed-funded companies raised a Series A within 24 months. At the 2020 peak that figure approached 40%. It then collapsed: the Q1 2022 cohort fell to 15.4%, less than half the peak. Recent cohorts sit at roughly 15–20% within about two years.

Carta's cohort data tells the same story from a different angle. Of companies raising a $1m+ seed round in 2023, 24% had progressed further; for the 2024 cohort the figure was 16% — though the younger cohort has had less time, so some of that gap will close.

Reading the number correctly

Two cautions. First, graduation rates are measured over a fixed window, so recent cohorts always look worse than they will eventually prove — a company raising its Series A at month 30 is counted as a failure at month 24.

Second, the trend has stopped worsening. Both the Q1 and Q2 2024 cohorts posted higher four-quarter graduation rates than 2022 and 2023, recovering to roughly 70–80% of 2018–19 levels. That is not a return to the peak, but it is not continued decline either.

What it changes about planning

If the base rate of reaching Series A within two years is 15–20%, then an 18-month runway plan assumes an outcome that most companies do not achieve on that timetable. The practical response is longer default runway, not better odds.

It also shifts what seed capital is for. When the next round followed reliably, seed could fund a plan. When it does not, seed has to fund a proof — enough evidence that the company is one of the minority worth underwriting at the next stage, with enough time left to raise on it.

The corollary is that the milestone matters more than the month. Companies that reach Series A late but with clear evidence generally fare better than those that reach the market on schedule without it.

  • Plan runway against a two-year-plus horizon, not eighteen months
  • Define the specific proof the next round requires, early
  • Treat the graduation rate as a base rate to beat, not a forecast

Sources

Photo: Unsplash.