Through Q3 2026, an estimated 8,625 US startups closed their first-ever venture financing per Pitchbook. That already beats 2021’s full-year record of 8,507, with a quarter still to go. 2025 also came close to the 2021 record, so this is two near-record years in a row. At the current pace, 2026 lands around 11,500 first-time financings by our estimate. The dollars are a record too: $34.3 billion through Q3, pacing ahead of 2021’s $40.7 billion full-year high.
A record number of new companies and a shrinking number of active VCs should make this a great time to be a seed investor. It isn’t. Many smaller VC firms told PitchBook’s Jacob Robbins they’re struggling to get in the door at all. Rob Biederman of Asymmetric Capital Partners called the market “almost comically competitive.”
So smaller funds are moving to the one place megafunds don’t scale well: people who haven’t started a company yet.
Pre-Seed Valuations Tripled to $12M From $4M in 2020
The median US pre-seed pre-money is now $12 million, triple 2020’s $4 million. The median seed pre-money is $18.3 million, up from $16.0 million last year.
Meanwhile the median seed check fell from $3.4M to $3.0M, the only stage where deal size went down in 2026. A $3.0M check at an $18.3M pre buys about 14% of the company. Last year it bought about 17.5%. The average first round tells the same story: about $4.8M per company in 2021, about $4.0M in 2026.
Smaller checks, higher prices, less ownership, at the exact moment there are more companies to choose from than ever.
The Median Series A Is Now $17.4M
Seed got cheaper per round. Everything after it got much more expensive.
A small fund that leads a $3M seed can’t defend its position in a $17.4M A. And the money is concentrated: in Q3, deals of $100M+ were about 5% of deal count and 75% of deal value. For the year, 82.7% of US venture dollars went to AI.
927 Emerging Firms Closed a Fund in 2022. 211 Have Through Q3 2026.
- $108.5B raised across 699 US venture funds through Q3
- Funds of $500M+ took 78.1% of capital while making up 6% of funds closed
- Andreessen Horowitz alone closed $23.8B, more than 20% of all US venture capital raised this year
- Established firms (Fund IV+) took a record 88.2% of capital
- First-time funds: $4.9B across 81 funds, on pace for the fewest in a decade
- Emerging managers closing a fund: 927 in 2022, 440 in 2025, 211 through Q3 2026
Megafunds took about $84.7B. That leaves roughly $23.8B for about 650 other funds, around $36M each. One firm, a16z, raised about as much as every non-megafund in America combined.
Funds between $100M and $500M were about 17% of funds closed before 2021. In 2026 they’re 10%, the lowest PitchBook has recorded.
The cause is distributions. Net cash flow to LPs has been negative by $202B since 2022, and when LPs do get cash back, they recommit it to the multistage fund that sent it.
8,625 First Rounds, 211 Emerging Managers, $202B Not Yet Returned to LPs
AI has made it much cheaper to start a company, and more people are doing it than ever. But the capital behind those first rounds keeps consolidating into fewer firms, first checks are shrinking, pre-seed prices have tripled since 2020, and the A now costs $17.4M at the median. Until LPs see real distributions, expect fewer small funds, more megafunds writing seed checks as options, and more small VCs meeting founders before there’s a company to invest in.
