It’s no secret that a Series A crunch is happening, as 500 Startups‘ partner Paul Singh reminded the audience during a presentation he gave at Betamore on Feb. 11.
“The Series A crunch is a fact,” Singh said. “There are a lot of overfunded early-stage companies now.”
The number of deals undertaken by angel investors has ballooned in recent years, with no proportional increase in the number of later-stage deals. According to CB Insights, the crunch will leave more than 1,000 startups “orphaned.”
For startups, this means two things, as Singh said: don’t run out of money in Q4 of 2013, and don’t run out of money in Q1 of 2014. In other words, “raise 12 to 18 months of funding,” he said.
Watch Paul Singh discuss the Series A crunch during his presentation at Betamore: