MONEY

Is the Series A Crunch a Myth?

A new report looks at 10 years worth of data on VC deals. Here's what you need to know.
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Much has been said about a Series A crunch, but entrepreneurs should be more concerned about a possible Series B crunch, according to a new analysis published today.

The analysis, which was published by The Big Data Group and SiSense, found that the number of Series A deals actually increased in 2012, and those deals closed faster than they did in 2011. However, fewer Series B deals were done in 2012, with 45 more days on average needed to close the deals.

“It’s more of a Series B crunch than a Series A crunch,” said Dave Feinleib, managing director at The Big Data Group, in a press conference today.

Based on data from Crunchbase, NASDAQ, and other sources, the study analyzed 100,000 companies between January 2000 and February 2013. (Entrepreneurs can access the data here.)

Here are the three more trends that the analysis revealed:

Fewer deals, more money. The number of start-ups that received funding in 2012 declined, although they raised 22 percent more capital on average. On the whole, investment rounds closed 30 percent faster in 2012 than in 2011.  

More money for enterprise, less for web. Enterpise companies raised more money in 2012, while web companies raised less. Enterprise deals increased by 6 percent, and they raise 40 percent more money in 2012 than in 2011. But web deals decreased by 13 percent in 2012, and the total size shrank by about 45 percent.

What's in a name? The data also revealed several interesting start-up trivia. The most popular first letter for a start-up names is S, while the most unused first letter is X. Start-ups whose names have 6 to 10 characters have the most exits and IPOs.

Last updated: Mar 14, 2013




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