This post originally appeared on First Round Capital's blog and has been republished with their permission.

Shortly after my first child was born, a friend gave me a copy of a book called "The Blessing of a Skinned Knee." The book was full of contrarian wisdom. While most new parents' natural instincts are to improve their child's life by removing obstacles, eliminating every potential source of pain, and helping them avoid adversity, the author of the book cautioned against overprotecting your child. Specifically, her thesis was that grit and resilience are extremely important life skills, and that it is important for people to learn how to overcome adversity (like a skinned knee) at a young age. That way they aren't surprised when they inevitably experience obstacles at an older age.

There has never been a better time to be an entrepreneur. The number of seed-funded companies has quadrupled over the last four years. Over 200 Micro-VC firms have recently raised over $4 billion to invest at the earliest of stages. AngelList and FundersClub are growing in popularity. This all adds up to an awesome environment for entrepreneurs to get started. While it used to take weeks or months to raise a seed round, we're now seeing some rounds get raised in a matter of days. Incubators and accelerators are pushing out larger numbers of companies -- many getting term sheets within hours of walking off the demo day stage.

Ironically, I believe this current "Seed Surge" is unintentionally exacerbating a Series A Crunch. The current free flowing seed stage capital is giving lots of founders a false sense of confidence when going into their Series A. As Y Combinator President Sam Altman recently tweeted, "...seed money is so easy to raise in the current environment that founders assume they can just raise more money whenever they want..."

I recently worked with a team of talented, young founders who had raised their Series Seed financing without breaking a sweat. They had their choice of investors (I'm thankful they chose us) and their seed round was oversubscribed by 2x. They set out to raise their Series A round six months later -- and they were in for a rude awakening. They ended up raising money, but not as much as they hoped for, it was much much harder than they expected and took months to cross the finish line. In the CEO's words, "Our seed round was super fast and hyper-competitive, and then we went into the A and started getting interrogated about our data. It was like graduating from elementary school straight into college."

This experience mirrors that of many founders and startups I've seen both inside and outside the First Round community. I believe, across our industry, the unprecedented amounts of seed funding available to startups early on is setting them up for a tough reality check at Series A. You can call it a "crunch" or whatever you'd like, but it's significantly impacting companies' long-term success. Looking at this trend, I think the key is to stay lean and thoughtful after the initial money hits the bank.

Below is my thinking on why this is so critical, and what founders can do to avoid getting killed in the crunch.

What's Happening?

Seed funding is more plentiful and easier to raise today than I've ever seen during my career. What that means, ironically, is that this makes everything much harder. It sets an expectation -- especially for young, first-time founders -- that something they expected to be challenging is relatively easy, and this sets strong expectations for the next time they do it. The problem is that the number of A rounds hasn't changed. That amount of Series A capital HAS NOT increased. So, if you have 4x the number of companies with seed funding, that's 4x the players competing for the same money... making it 4x harder to raise an A round than it was five years ago.

I talk to a lot of founders about their Series A experience, and more often than not they say they were shocked by how hard it was to get a term sheet, how long the process took, and how much more complex the conversations got. As one CEO I spoke to noted, "The way that seed funding is all about your idea and team, Series A is all about the numbers. We weren't tracking cohorts or anything at all. I didn't know about LTV or CAC, or how to answer questions about the economics of scale. We walked into an interrogation that we weren't prepared for."

One reason this happens is that founders mistake casual conversations with VCs for serious interest. Founders get a bunch of emails or calls from VCs, and then feel like they have to start their fundraising process immediately or miss out. This can (and does) lead to a lot of hasty pitching before companies are ready. And here's the deal on the VC side: both partners and associates are paid to get out there and build relationships with promising young companies, but there's no commitment. Investors want to make sure they get "the call" from founders when they begin fundraising -- so they're motivated to send "happy vibes" in order to stay around the hoop. These happy vibes are heard by a founder's "happy ears" -- often leading the founder to draw false conclusions about the true level of potential VC interest.

Series A investors are always looking to catch a company before they run an official process, as it's almost always in their best interest to pre-empt a competitive funding situation. That means that they're aggressive in trying to get early meetings. As first-time founders see their inboxes fill with email from VCs, they often assume that the volume and intensity of VC interest will translate into an easy funding round -- and often (mistakenly) decide to start a fundraising process too soon.