Peter Walker says the typical Series A has grown from about $8 to $10m to $13 to $15m, and he would be most cautious investing there now.
Walker says the Series A bar is about twice what it was, with founders now needing a $500m to $1bn story and about $3.5m in ARR.
Walker says only 10 to 11% of companies that raised in Q1 2025 reached Series A, while 36 to 37% of new Carta companies are solo-founded.
Series A Bar Doubled as AI Money Demands Decacorn Exits
Early-stage venture is being repriced around AI. Rounds and valuations have roughly doubled, so investors need decacorn exits to make Series A math work. Founders face a bar about twice as high with weaker defensibility, in leaner teams and mostly in the Bay Area.
Takeaways
Valuations doubled and AI looks like a bubble. Median valuations have roughly doubled in about three years, and the typical Series A grew from $8-10m to $13-15m. Some AI infrastructure companies raise hundreds of millions with no revenue. Walker expects many flops and a few large winners, as in 2021.
Series A math now requires decacorn exits. At an $80m post-money, a Series A investor needs an exit near $5bn net of dilution. A $1bn exit returns only about 5x after 50% dilution. Walker calls upsized exits the biggest change in venture and is most cautious at Series A.
The Series A bar roughly doubled. Series A meetings now expect about $3.5m in ARR plus a story of $500m to $1bn, roughly twice the bar of a couple of years ago. Growth alone is not enough because AI application products overlap and defensibility is low.
The Bay Area dominates funding and pricing. 90% of $500m post-money seed rounds are in the Bay Area, which also takes a quarter to a third of Series A deals. Median Series A is $85m post money there, against $65m in Austin. Walker says visit rather than move.
Teams are leaner and founders increasingly solo. Median seed companies on Carta have four employees beyond founders, and Series A companies have 15 to 17, against about 45 several years ago. Solo-founded companies are 36-37% of 2026 joiners, up from 25-26% three years ago.
Graduation improves while fund formation tightens. About 10-11% of Q1 2025 raisers have reached Series A, against 4-5% in 2022 or 2023. Fund formation is down, many 2020 and 2021 vintage VCs are on last funds, and mega funds pressure $200-400m Series A funds.
Founding now beats joining early teams. After the Windsurf events, founding a company looks more attractive than joining an early team, and many acquisitions are for AI talent. Srugo says a typical VP engineering grant is about 2%, while a founder might offer 5%.
Typical AI application round sizes
Pre-seed is usually under $2m at a $10 to $12m cap.
Seed is $4 to $5m at a $20 to $22m post-money valuation.
Series A is around $14 to $15m at roughly $75m post money.
Outside the Bay Area, Srugo estimates the median seed at around $15m, against about $20m overall.
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