Fundraising dynamics continued to evolve in Q1 2025, with early-stage companies seeing a modest uptick in down rounds while late-stage companies experienced fewer. Down rounds rose to 20.8% of deals at the Seed through Series B stages, up from 18.5% in the second half of 2024. In contrast, only 22.2% of Series C+ rounds were down, a significant drop from the first half of last year.
Flat rounds remained steady at the early stage but declined at the growth stage, suggesting increased investor confidence in the most mature startups—or tighter founder control over valuation reset timing.
What’s rising instead? Extension rounds and follow-on investments. Together, these trends point to investors doubling down on and bolstering existing portfolio companies rather than chasing new deals, especially in a market that still demands careful capital deployment.
One other noteworthy shift: companies that raised priced equity rounds did so on a faster timeline as compared to Q4 2024. This may be a signal that some companies are successfully accelerating progress.
Get the full AI outlook in the Venture Beacon Q1 2025 report.
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