Carta just dropped their Winter 2025 State of Seed report, and it’s packed with data every founder and investor needs to understand. Here are the 10 most important takeaways for B2B founders:
#1. Solo Founders Are on the Rise—But VCs Still Don’t Love Them: 35% of startups are solo-founded, but only 17% of VC-backed startups are.
Here’s a fascinating disconnect: 35% of startups incorporated in 2024 had solo founders, up from just 17% in 2015. That’s a doubling in less than a decade.
But when you look at VC-backed companies only? Solo founders represent just 17% of funded startups. VCs still overwhelmingly prefer teams—the two-founder configuration remains the sweet spot at 34% of funded deals.
The message is clear: you can build solo, but raising venture capital will be harder.
#2. SAFEs Have Won. Completely: 92% of pre-seed rounds now use SAFEs, up from 54% in 2019.
The SAFE vs. convertible note debate is over. Convertible notes have dropped to just 9%.
Post-money SAFEs with a valuation cap only (no discount) have become the standard structure—61% of SAFEs in 2025 use this format. When there is a discount, it’s almost always exactly 20% (63% of cases).
If you’re a first-time founder and your lawyer is pushing convertible notes, ask why.
#3. The Pre-Seed Market Is Robust: $815M deployed in Q2 2025 alone for sub-$5M SAFE/Note rounds.
Despite all the doom and gloom, capital for sub-$5M rounds on SAFEs and convertible notes is flowing. Q2 2025 saw $815M deployed into pre-priced rounds, continuing a strong trend since 2023.
The early-stage market isn’t broken. It’s just more selective.
#4. Seed Valuations Are Bifurcating Hard: 95th percentile seed valuation is $80.5M vs. median of $20M—a 4x spread.
The median seed valuation is $20M post-money. But here’s what’s interesting: the top end is stretching dramatically. The 95th percentile hit $80.5M in 2025—nearly 3x higher than the $28.5M 95th percentile in 2019.
Meanwhile, the 25th percentile is only $13.8M. We’re seeing a barbell market where hot deals (especially AI) command premium valuations while everyone else fights for more modest terms.
#5. 24% Of StartUps Lose a Founder By Year 4.
Co-founder breakups are far more common than most founders want to admit. Among VC-backed, 2-founder teams incorporated from 2015-2024, roughly one in four have lost a co-founder by the four-year mark.
The attrition accelerates over time: by year 5 it’s ~30%, by year 6 it’s ~35%, and by year 8 it’s approaching 40%. The 2015 vintage hit 38.9% co-founder departures by their eighth year.
This is why co-founder vesting exists. And why investors spend so much time diligencing the founding team dynamic. The odds of a breakup are higher than most realize.
#6. Time to Series A Is Stretching: Median time from Seed to Series A is now 2.1 years, up from 1.5 years in 2019.
For AI startups, it’s faster at 1.9 years—but even they’re seeing the timeline extend from their 2023 lows. The 75th percentile has ballooned to 1,251 days (3.4 years).
Plan for 24+ months of runway at seed. The days of quick flips to Series A are largely behind us.
#7. Graduation Rates Are Stabilizing Around 50% by Year 4: ~50% of seed companies reach Series A by Q16 (4 years post-seed).
Looking at the 2019-2020 cohorts that have had time to mature, roughly half of seed-stage companies eventually graduate to Series A by their fourth year. The 2019 Q1 cohort hit 49.1% by Q16.
Some good news: recent cohorts are tracking slightly better early. Companies that raised seed in Q2 2024 are at 8.9% graduated by Q4 of their first year—better than the brutal 2022 cohorts at the same point.
#8. Founders Are Hiring Later and Running Leaner: Average seed-stage team size dropped to 6.2 employees in 2025, down from 10.3 in 2021.
The median time to first hire has increased from 214 days in 2019 to 284 days in 2024. Companies are staying leaner longer.
The pattern holds across stages: Series A teams average 16.8 employees (down from 25.9 in 2021), and Series B teams average 48.2 (down from 72.3 in 2022).
This is the AI efficiency thesis playing out in real-time. Smaller teams. Same outcomes.
#9. SF and NYC Dominate the Top Decile: 66% of top-decile seed valuations go to startups in San Francisco (44%) or New York (22%).
Geographic dispersion exists at the lower valuation tiers—only 6% of bottom-quartile valuations are in the Bay Area. But the premium deals remain concentrated in the traditional hubs.
If you’re raising outside SF or NYC, your path to a top-tier valuation is statistically harder.
#10. Founder Ownership Drops Faster Than Ever: Median founder ownership falls from 56.2% post-seed to 23.0% post-Series B—a 33 percentage point drop in two rounds.
The median founding team owns 56.2% after priced seed. By Series A, that’s down to 36.1%. By Series B, it’s 23.0%. By Series D, founders hold just 11.4%.
Investors cross the 50% ownership threshold somewhere between Series A and Series B. This dilution curve means founders are giving up roughly 20 percentage points per round in early stages.
More Quick Hits from the Data
- AI engineering compensation is exploding. Equity packages for senior AI/ML engineers are up 15-40% since January 2024, with Senior Directors seeing 40% increases. Cash compensation is up too, but equity is where the real action is.
- Seed-to-Series A step-ups are recovering but not back to 2021 levels. Median valuation jump is 2.6x in 2025, up from 2.4x in 2024, but well below the 4.2x peak in 2021.
- Your first hire gets 1.5% equity (median). It drops fast from there: hire #2 gets 0.85%, hire #3 gets 0.50%, hire #4 gets 0.44%, and hire #5 gets 0.33%. The equity curve is steep.
- Advisors get less equity than you think. Median advisor grant at pre-seed is just 0.24%, and only 10% of pre-seed advisors get more than 1%. At seed it drops to 0.12% median. Stop giving away points to advisors who won’t move the needle.
- AI is eating share at every stage. AI companies now capture 42% of seed capital (up from 23% pre-ChatGPT), 35.5% of Series A, 40% of Series B, and a staggering 70% of Series E+ rounds. The concentration is only accelerating.
- Median seed raise is $4M, but the gap is widening. The 95th percentile seed round is now $16.6M—over 4x the median. Top-tier companies are raising mega-seeds while everyone else clusters around $2-4M.
The Seed VC Market Seems Healthy in the Aggregate — But It’s Very Bifurcated
The seed market in 2025 is healthy but bifurcated. AI companies operate in a different universe—higher valuations, faster timelines, more capital. Everyone else is competing for a smaller share of attention with leaner teams and longer runways.
SAFEs have become completely standardized. Solo founding is increasingly viable operationally but remains a handicap for fundraising. And if you want to play at the top tier of valuations, you probably need to be in SF or NYC.
The fundamentals haven’t changed: build something people want, get to metrics that matter, and raise when you have leverage. But the benchmarks for “good” keep moving—and now you have the data to know exactly where you stand.
Full repot here.
