The largest multi-stage venture funds are accelerating their pace of seed investments in 2013 and are on pace to hit a multi-year high for deal activity.
Between Q1’12 and Q3’13, five multi-stage venture firms who have been active at the seed stage – Accel Partners, Andreessen Horowitz, Greylock Partners, Kleiner Perkins Caufield & Byers and New Enterprise Associates – have participated in 149 seed deals totaling $258M of disclosed funding.
Series A crunch concerns aside, it seems investors have a seemingly limitless appetite for seed investments (but less so in NY). In particular, these 5 multi-stage funds have already done 70 seed deals in 2013 and at the current run-rate, they should eclipse 90 deals in 2013.
For many of the largely undifferentiated seed or micro-VC funds, this spells even more trouble. Already the data shows that companies that receive seed funding from larger, multi-stage venture capital firms actually attract follow-on funding at a higher rate than those funded by seed or micro-VCs. And with AngelList syndicates – while still unproven – opening up another funnel to early-stage capital, the squeeze on seed-stage players who don’t bring a lot to the table appears like it could tighten quickly.