The facts are clear:

• • Sub-$5M rounds, once the majority of U.S. VC deals (over 70% a decade ago), have now fallen to less than half that share.
  • Multi-stage funds are crowding out traditional seed investors by offering larger checks and stronger brand pull -> even if they offer less hands-on support.
  • Startups are playing into the dynamic, using momentum and FOMO to justify higher valuations and raise more capital, often at the expense of boutique seed firms.

The consequences are also clear:

• • Early-stage investors like us are being pushed further from the table unless we bring a truly differentiated value proposition.
  • Founders chasing big names may find themselves stranded when their startup needs operational help the most.
  • Traditional seed-stage dynamics, rational valuations, meaningful ownership, and high engagement are harder to maintain.

Shrinking sub-$5M rounds compresses opportunity for high-conviction angel investing. It also sharpens the need for tools like TeamDNA(r) and DealIQ(r), which can help investors de-risk earlier decisions and help founders stand out without simply inflating the raise size.

We’re not imagining this shift. It’s systemic.

Learn what precipitated this post –  The incredible disappearing sub-$5 million round – PitchBook