Seed Rounds Are Now 2X 2021 Prices. Here's the Data.
Description
Per Carta's Q1 2026 data: → Top 5% of seed valuations: $175M (3X year-over-year) → Median seed round: $45M → Overall pricing: 200-300% above the 2021 peak A typical seed round used to be $15M. Now if you're investing at that price, you're in the bottom 25th percentile. Brit Morin breaks down the numbers and what they mean for portfolio construction — and whether the AI bubble is sustainable. This isn't 2021. It's double 2021. We’re also on ↓ X: https://twitter.com/moreorlesspod Instagram: https://instagram.com/moreorless Spotify: https://podcasters.spotify.com/pod/show/moreorlesspod Connect with us here: 1) Sam Lessin: https://x.com/lessin 2) Dave Morin: https://x.com/davemorin 3) Jessica Lessin: https://x.com/Jessicalessin 4) Brit Morin: https://x.com/brit
Summary
Generated by claude-haiku-4-5-20251001Seed Rounds Are Now 2X 2021 Prices: Analysis
Main Topics
- Dramatic increase in seed round valuations
- Comparison between current market conditions and 2021 levels
- Impact on venture capital portfolio construction decisions
- Uncertainties around AI bubble sustainability and inflation
Key Points
Valuation Data (Carta Analysis)
- Top 5% of seed rounds: $175 million valuations
- Up 3x over the last year
- Spike occurred between Q4 and Q1
- 50th percentile (median): $45 million seed rounds
- Historical baseline: Typical seed rounds used to be $15-20 million
Market Comparison
- Current valuations are double those of 2021 (not just matching them)
- A traditional investment of 10% equity for $1.5-2 million now falls below the 25th percentile
- Market trends have gone "completely vertical"
Investor Decision-Making Challenges
- Portfolio construction becomes more complex with inflated valuations
- Fund managers must decide between:
- Making fewer, larger checks ($10 million vs. $2 million)
- Reducing total number of portfolio companies
- Multiple uncertainty factors influence strategy:
- Inflation trajectory
- Sustainability of AI hype
- Risk of market correction
Notable Quotes
> "It was up 3x over the last year"
>
> "Actually, it's double 2021"
>
> "Does this make you sweat as an investor?"
Takeaways
- Market Inflation: Seed valuations have reached unprecedented levels, far exceeding 2021 peaks
- Strategic Pressure: VCs must fundamentally rethink portfolio construction and check size strategy
- Risk Assessment: Current valuations create uncertainty about market sustainability and require careful planning for potential corrections
- Changed Economics: Traditional seed round structures are no longer competitive in the current market
Transcript
The top 5% of seed rounds are being $175 million valuations. It was up 3x over the last year. Carta announced seed valuations are skyrocketing more than ever before. Between Q4 and Q1, things went completely vertical. The top 5% of seed rounds are topping $175 million valuations. It was up 3x over the last year. And even the 50th percentile, we're talking about $45 million seed rounds, which is insane. A typical seed round used to be $15 million, maybe $20. You buy 10% for $1.5 million, $2 million. And now if you're doing that, you're actually under the 25th percentile. And you might think this sounds a lot like 2021. Actually, it's double 2021. Does this make you sweat as an investor? We're about to raise our next fund. And I'm doing a lot of data gathering about portfolio construction. When you run a portfolio construction model, you're saying, I've got $100 or $200 million. I'm going to make X bets at this check in this fund. Now I'm deciding, am I going to make $2 million checks or $10 million checks? Where is inflation going? Is the AI bubble going to keep going? Is it going to fall dramatically? things went completely vertical. The top 5% of seed rounds are topping $175 million valuations. It was up 3x over the last year. And even the 50th percentile, we're talking about $45 million seed rounds, which is insane. A typical seed round used to be $15 million, maybe $20. You buy 10% for $1.5 million, $2 million. And now if you're doing that, you're actually under the 25th percentile. And you might think this sounds a lot like 2021. Actually, it's double 2021. Does this make you sweat as an investor? We're about to raise our next fund. And I'm doing a lot of data gathering about portfolio construction. When you run a portfolio construction model, you're saying, I've got $100 or $200 million. I'm going to make X bets at this check in this fund. Now I'm like, am I going to make $2 million checks or $10 million checks? Where inflation is going? Is the AI bubble going to keep going? Is it going to fall dramatically?