The early-stage venture capital market is weird and chaotic

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When SoftBank announced its first Vision Fund back in 2017, TechCrunch gawked at the size of the fundraising vehicle and its $100 million minimum check size. Noting a few of its early deals, we wrote that “the party is just getting started.”

Little did we know how accurate that quip would become. The Vision Fund poured capital into a host of companies with big plans, or what could at least be construed as grandiose hypotheses about the future. And after deploying $98.6 billion in a blizzard of deals, SoftBank left the venture capital market changed.

It’s not a stretch to say that the Vision Fund helped make the venture capital game faster in terms of deal pacing and larger in terms of deal scale. The Vision Fund was also content to write checks at amped valuations, leading some investors to privately carp about lost deals.

“Strange” may be the best way to describe today’s venture capital market, at least in the United States.

Today’s venture capital market is currently enduring another wave of venture capital angst, this time driven by Tiger Global. Tiger often writes smaller checks than what SoftBank’s capital cannon wielded, but its pace and willingness to invest a lot, very early, at prices that other investors balk at, is making waves.


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And while Tiger races to build what increasingly appears to be a private index fund of software startups that have reached some sort of scale or growth, the venture capital market is seeing its traditional benchmarks tied to different tiers of investment molt, meld, or disappear altogether.

Old metrics that would ready a startup for a successful Series A are antiquated clichés. As are round sizes for Series A startups; it’s increasingly common for seed-stage startups to reload their accounts several times before approaching an A, and Series B rounds often resemble the growth-stage deals of yesteryear.

It’s confusing, and not Tiger’s fault, per se; the Tiger rush is a variation on the Vision Fund’s own venture disruption. And the Vision Fund followed in the footsteps of a16z, which raised large, rapid funds early in its life and garnered a reputation at the time for having a willingness to pay more than other venture capital firms for the same deal.

Where does all the change leave us? In a fascinating, if turbulent, market for startup fundraising.

For example, The Exchange caught up with Rudina Seseri of Glasswing Ventures the other week to chat about AI startups. During our conversation concerning venture capital dynamics, Seseri said something incredibly interesting: With as much seed capital as there is in the market today, she’s seeing startups raise later Series As than before. But, she added, with the creep of late-stage capital into the earlier stages of venture investing, Series B rounds can happen rapidly after a company raises an A.

So, slow As and fast Bs. We wanted to dig more into the concept, so we asked a number of other investors about her view. We’re tackling the question in two parts, focusing on the U.S. market today and the rest of the world later this week.

What we found out is that while Seseri’s view regarding late As and early Bs is correct for many startups, it really depends on whether they are on the radar of later-stage firms. And yes, some of the investors mentioned Tiger in their responses. Let’s dive in to understand what founders are really dealing with.

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