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Startups are doing fine, but scale-ups and unicorns are in deep water

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It seems the younger a startup is today, the better its fundraising prospects.

Recent data from Carta pushes back against the narrative that 2023 has been tough on startups that are not building an AI product. In fact, grouping startups by maturity yields a very different picture.


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Earlier-stage startups are seeing stronger valuations and smaller declines in total capital availability, welcome boons in a year of mostly negative news. However, late-stage investment has been in retreat, and since this segment usually accounts for the most dollars, people have been making the mistake of conflating a dramatic late-stage recession with general startup malaise.

Subscribe to TechCrunch+We don’t mean to be glib. There are certainly many early-stage startups that are struggling and late-stage startups that are thriving. And Carta’s data is predicated on its customer base, which makes the information useful and directional, but not whole.

Still, the trends that we can spy are an effective argument against the logic of startups being encouraged to stay private as long as possible. For private-market investors looking to make the most of their investment, baking startups in the oven until they were fully ready worked for some time, but this method of running and scaling tech businesses no longer looks so winsome.

Perhaps taking an early path to an IPO was the right idea all along. Let’s explore.

How fare startups today?

Parsing data from Carta on the third quarter of 2023, it’s clear that grouping startups by stage makes sense. For instance, the seed-stage was deemed to be immune to decline, but there’s only been a 58% decline in capital raised by seed-stage startups in Q3 2023 compared to Q4 2021. Meanwhile, Series A, B, and C rounds were all down 80% or more in value in the third quarter compared to Q4 2021.

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