TLDR:
- The time lapse between funding rounds for early-stage startups has reached the highest point in more than a decade.
- The median time lapse between Series A and Series B rounds in 2024 was 28 months, the longest span since 2012.
According to a recent Crunchbase survey, the time it takes for early-stage startups to close funding rounds has significantly increased in 2024. The median time lapse between Series A and Series B rounds reached 28 months, the longest span in over a decade. The average time between these rounds also hit a high of 31 months this year, matching the record set in 2023. The analysis revealed heavy variations in time spans between rounds, with some startups closing rounds in quick succession, while others took longer than average.
Some high-profile examples include xAI, an AI startup founded by Elon Musk, which closed a $6 billion Series B just six months after its previous round. On the other hand, Quantum Circuits, a quantum computing startup, raised a Series B six-and-a-half years after its Series A. The trend of startups taking two to three years between Series A and B rounds is becoming more common, allowing them time to meet growth milestones and put capital to work before seeking additional funding.
However, the clock is ticking for boom-era startups that last raised funds around 2021 when venture capital funding peaked. While some may still go on to raise Series B rounds, the odds diminish over time, as it’s rare for the time lapse between rounds to exceed three-and-a-half to four years. With a large pipeline of startups in need of fresh capital, the funding cliff looms large for many early-stage companies.
Overall, the data highlights the current challenges faced by startups in securing follow-on funding and the importance of timely fundraising to sustain growth and development in a competitive market.
