I’ve heard too much hyperbolic talk in the valley of a “Series A Crunch,”  meaning startups are currently hard-pressed to raise funding following a seed round. As the blog title suggests, I do not believe there is a Series A crunch.

It’s important to understand the data before being swayed by anecdotal information, on any topic. So let’s take a look at the data here.

The rise of seed-stage investing has been well-documented. It is one of the most important changes in the financing of high-tech startups in the last 20 years. Thus, currently there are more seed stage companies looking to raise Series A or Series B rounds.  And what does that funding activity look like? According to the data from the National Venture Capital Association (NVCA), the last 10 years show the following trend:

Basically, between 2003 and 2008, there have been between 200 and 300 early-stage companies funded per quarter. The last four quarters saw between 400 and 500 startups funded, which is a massive increase.

Now, the data is not perfect:  PWC, who collects the data, defines “early stage” as Series A/B, but also says it’s usually under $2.5M per round. I’m guessing that a few seed deals, particularly done by VC firms, have slipped into this bucket. But in aggregate, this data suggests that if anything, the VC community has been funding more, not fewer, early stage deals, i.e. series A. In terms of dollars, there’s a similar jump from roughly $1B per quarter in 2003 to roughly $2B per quarter for the last 4 quarters.

I believe the numbers support the following reality: good companies have always been able to raise money. The amount of early stage investing has increased in the last decade. The intangible elements of the financings, like number of term sheets and the speed at which the round closes, are hard to evaluate quantitatively — and I’m sure they ebb and flow.  At IDG Ventures, we have been investing steadily.  In the past five years, we have made three to four deals per year in Series A or B.  So our own activity is consistent with the industry data, as well.

My advice: before making a conclusion about a Series A crunch or bubble, look at the data.