Between 2015 and 2024:

VC fundraising nearly doubled from $42.3B to $81.2B. But the share of sub-$5M deals plummeted

Correlation?

-0.68 between VC capital raised and small deal share

Translation?

More capital ≠ more early-stage support.

Here’s why this matters:

Big funds need big checks to make returns work. A $500M fund can’t write $1M checks. It doesn’t add up. So small startups get left out of the funding party.

The result?

Seed capital dries up. Risk shifts to angels, syndicates, and accelerators. Fewer small bets = less innovation at the edges. We don't have a startup idea problem. We have a capital allocation problem.

Founders, angels, and micro-VCs:

This is your moment to step up. The best companies often start small, if we fund them.

PS: thanks to Tomasz Tunguz for the great insights.