Stories about seed funding often contain sappy metaphors about planting seedlings and nurturing them to maturity. In reality, it’s a brutally Darwinian business: most companies fail, successful ones get diluted and exits commonly take a decade or more.
That said, seed also has the highest potential returns of any investment stage. Unlike most VCs, seed and angel investors can do a lot of deals with a few million dollars. And no one complains it’s boring.
So far this year, the relative turn-offs of seed-stage investing seem to be outweighing the draws. Fewer North American seed funds launched in 2017 compared to year-ago levels, according to an analysis of Crunchbase data. Total investment and round counts are also down sharply over the past 12 months from the year-ago period for seed and angel deals, even as late-stage investment is on the rise.
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