Early-stage funding posted a slowdown in the third quarter, and it wasn’t immediately clear why.
A closer look, however, reveals that for U.S. startups the chief reason appears to be a decline in Series B funding rounds. Meanwhile, globally, the early-stage slowdown was caused by a pullback in Series A financings.
Let’s unpack the numbers below and speculate about what the data could mean for the broader startup economy.
U.S. Early Stage Slowdown
We’ll start with U.S. early-stage startup investment, which saw a decline of 18 percent in reported funding in Q3 of 2019, compared to Q2. The drop came as overall funding remained flat-to-up at other funding stages.
Early-stage rounds consist of Series A and Series B rounds. And while Series A reported investment totals held up at similar levels in both Q3 and Q2 of this year domestically, the same cannot be said for Series B.