Seed Stage VC Fundraising Q3 2023

I advise many early stage SaaS companies on many things, especially in competitive analysis. Many of them are attempting to raise either preseed or seed stage VC funding. The early stage VC funding market has experienced a significant decline since the market peak in February 2021. While most of my clients have viable products and market opportunities, fundraising has become a significant challenge. This post will present some key statistics that describe the current state of the early stage fundraising market.

Put the Market into Context

It is important to put the SaaS market into context. According to the Software Equity Group’s SaaS Index, median SaaS Enterprise Value/Revenue (ttm)valuations reached a peak of 16.x in February 2021 — almost the peak of the Covid-19 crisis. In November 2023 the median SaaS valuation had declined to 5.7x — almost two thirds of what it had been in 2021.

Software Equity Group’s SaaS Index,

Early Stage is Still Active, but Activity has Slowed

Early stage (preseed and seed) still accounts for a major portion of VC activity. According to…