US seed-stage investing flourished during pandemic – TechCrunch

As united States enter their first wave of COVID-19 lockdowns, startup land had broad expectations That a reimbursement had arrived. But the expected return of high-burn, high-growth startups by cheaper capital provided by venture capitalists The establishment Ever big money, Failed to arrive.

Instead, the Came to pass.

Trimmed Fast and aggressively During the early months of the epidemic. But by the middle of Q2, enterprise activity had warmed up and the deal was concluded in the third quarter Is fast and competitive, Some investors have described it as the hottest summer in recent years.

Venture capital as an asset class has survived the stress test of the epidemic.

But lost among some Splash Margadis And High interest IPO Those who could dominate the news cycle were seed-stage startups. The raw small companies that represent the grist that will shape themselves into the next set of giants.

TechCrunch explores what happened in seed-investing to uncover what had happened between the storm and late-stage startup activity. According to a TechCrunch analysis Pitchbook data And a survey of venture capitalists, some trends became apparent.

First, the pattern of Growing seed-check size Despite the earlier years, the business environment continues to decline. Second, more expensive and larger seed deals were not only caused by excessive capital in private markets. Instead, COVID-19 was shaken, considered attractive by private investors. And their numbers do not necessarily increase for change.

Let’s dig into the data and see what it can teach us about this wild year. Then we will listen Eniac VenturesNihal Mehta, Freestyle Jenny Lefcourt, Pear VC Mar Hershensen And Of opposite capital Eric Tarakenski One of the things he saw in 2020 is that our data is included.

American Seed Market in 2020

If you didn’t think much about seeds in 2020, you are not alone. Late, huge affair Most of the media consumed oxygen, Leaving small startups to compete for scraps of attention. There was so much late-stage activity – For example, about $ 90 million or larger round in Q3 – It was difficult to attract attention for small investments.

But despite being in the background, the dollar invested in seed-stage startups in the United States had an up-and-down year that was attractive:

Image Credit: pitch book

seed Dollar volume fell as Q1 progressed, reaching early 2020 in April, beginning Q2. But by May, the rate at which investors poured money into seed-level startups recovered to January levels — that is to say, the epidemic before June. COVID dipping for seeds was a short-lived affair.