Raiseward Ventures finds fewer seed-stage deals but larger funding rounds

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Raiseward Ventures finds fewer seed deals

Fewer deals, larger funding rounds

The US recorded 4,724 pre-seed and seed deals in 2025, down from 5,475 in 2024. Deal activity declined year over year in every quarter, with the sharpest contraction of 21.2% occurring in the second quarter. Despite the slowdown, the median pre-seed/seed round increased from $2.4 million to $2.9 million.

The trend was even more pronounced when examining seed-stage investments separately. The median seed round rose 22.6% to $3.8 million, while the average increased 37.5% to $6.6 million. According to Raiseward Ventures, the divergence reflects a longer-term shift. Between 2021 and 2025, the number of early-stage deals in the US declined 36%, while the median round size grew 45%.

The faster growth in average seed funding compared with the median may indicate a greater influence from larger investment rounds. However, the researchers caution that additional data on deal-size distribution is needed to determine the extent of capital concentration at this stage.

AI reshapes venture capital allocation

Artificial intelligence has emerged as a major driver of capital concentration across the broader US venture market. According to PitchBook–NVCA data cited in the research, US AI and machine learning investments reached $222.1 billion in 2025, more than doubling from $108.6 billion in 2024.

The sector accounted for 65.4% of total US venture deal value, up from 50.9% the previous year. Yet AI/ML represented just 39.4% of all venture deals. This disparity illustrates how a substantial share of venture funding is flowing into a relatively smaller proportion of transactions.

However, Raiseward Ventures notes that the AI figures span all stages of venture funding, making it difficult to draw a direct connection between the AI boom and larger seed rounds.

Bigger checks do not mean easier fundraising

The increase in median funding rounds does not necessarily signal improving financing conditions for early-stage startups. As Raiseward Ventures notes, venture capital statistics capture completed transactions but exclude companies that attempted to raise funding without closing a deal. Consequently, larger reported rounds cannot be interpreted as evidence that capital has become more accessible.

For founders, the findings underscore the importance of realistic fundraising targets, disciplined financial planning, and clearly defined milestones. Rather than relying on market-wide averages, startups should benchmark their funding needs against companies at comparable stages and within similar sectors.

For venture capital firms, larger initial investments create additional challenges in portfolio construction, capital allocation, and maintaining sufficient reserves for follow-on funding. Raiseward Ventures concludes that the US early-stage venture market is shifting toward fewer, larger funding rounds. In this environment, the size of a startup's investment round is becoming a less meaningful measure of success than its ability to deploy capital efficiently and reach its next stage of growth.

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