A survey of North American VCs reveals that founders who adapt to evolving investor strategies are well-positioned to raise capital despite a market slowdown.

NEW YORK CITY, NY / ACCESSWIRE / December 18, 2024 / Forum Ventures, an early-stage B2B SaaS fund, accelerator, and AI venture studio, today announced the release of its new report titled The State of the Pre-seed and Seed VC Market - 2024. The report provides a comprehensive analysis of the 2024 pre-seed and seed funding environment, offering critical insights for founders and investors navigating a shifting venture capital landscape into 2025.

While 2021 and 2022 marked fundraising highs, the venture market has since undergone a correction, with 2024 funding levels projected to fall below 2016 benchmarks. However, despite the slowdown, there's cautious optimism for 2025 as investors and founders adapt to new norms.

Forum Ventures surveyed 150 North American VCs across 300+ pre-seed and seed deals in 2024, capturing data on industry focus, geography, company traction, and valuations. The findings highlight critical shifts:

• AI Leads the Way, But Focus Is Narrowing: Artificial intelligence companies continue to secure consistent funding at higher valuations, with over one-third (37.3%) of respondents backing an AI company. However, their focus is shifting from general-purpose generative AI to industry-specific vertical applications. Healthtech and fintech continue to attract funding, capturing 12.9% and 9.1% of investments, respectively.

• Focus on the Founder: 70% of investors ranked the founding team as the most critical factor in their decision-making process, far surpassing other considerations like traction (15%), product (8%) and business model (5%).

• Traction Metrics Take Center Stage: The median seed deal size in 2024 reached $3.1M, with traction metrics such as ARR ($300K-$500K) playing a critical role in securing funding.

• Increase in Bridge Rounds: 36% of investors noted an increase in bridge round participation compared to last year. This can be attributed to the lengthened time between rounds, where the average time between seed and Series A fundraising rounds increased to more than two years in 2024, up from 1.7 years in 2019.

• Geographic Diversification: While California (24%) and New York (15%) still dominate as primary hubs for venture-backed startups, there's a notable geographic shift. Texas now represents 10% of total North American pre-seed and seed investments, a significant jump from 4.2% in 2023.

For first time founders especially, fundraising in 2025 will require patience and a relentless focus on execution," says Michael Cardamone, CEO & Managing Partner at Forum Ventures. "Current liquidity challenges in the venture capital landscape have placed significant pressure on emerging managers, with downstream effects on early-stage funding for founders. Investors are increasingly selective and often need to see early signs of traction and momentum in order to move forward with an investment, leading to founders needing to prove more with less."

The State of Venture Capital - 2024 is available now, offering founders a clear picture of today's fundraising landscape, on the Forum VC website.

ABOUT FORUM VENTURES:

Forum Ventures is the top B2B SaaS fund, accelerator, and AI venture studio, backing founders from zero to sustainable. With 450 portfolio companies and over $100M in AUM, the firm is on a mission to make the journey easier, more accessible, and successful for early-stage B2B SaaS founders. Forum Ventures' portfolio companies have gone on to raise $1B+ in follow-on funding from funds like Bessemer Ventures, Kleiner Perkins, CRV, Craft, NEA, Menlo Ventures, Andreessen Horowitz, First Round Capital, Serena Ventures and many more. Learn more at https://www.forumvc.com/.

MEDIA CONTACT:

Lauren Gill, MAG PR at E: lauren@mooringadvisorygroup.com; P: 978-473-1362

SOURCE: Forum Ventures