Today, Y Combinator’s latest startup cohort will kick off a two-day presentation cycle. The Exchange loves a demo day, so we keep an eye on accelerators as best we can. We recently covered the latest concerning YC’s rival group Techstars’ geographic footprint as well.

As we wait for the first presentations to begin, this is a good time to take a quick look at the early-stage venture market that companies from accelerators of all stripes will operate in this year. Thanks to some early data from Carta, which many startups use to manage their cap tables, we can sketch a pretty clear picture of the state of venture for young tech upstarts.

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We recently learned that the earliest-stage rounds aligned the quickest to new market norms, while Series A and later ‘middle-stage’ rounds are still adapting to the changed venture market. We are not looking at Series D and later rounds today, saving our fire there for when we have more data and time.

Let’s talk median round sizes and deal values for seed through Series C in the first quarter of this year. How rough has 2023 been so far compared to a year ago? Have we seen any signs of recovery from Q4 2022? Is it getting easier for founders to raise money? The answers to those questions are not incredibly encouraging, except, it turns out, for the very smallest companies — like those we’ll see later today.

State of the early stage

Before we dive head-first into the numbers, here are some caveats:

First, we’re looking at data pulled from Carta’s users. That comes with considerations around the geography covered and the completeness of the data. Still, as Carta is a popular tool, its data is a strong place to start even if it is, as all data sets are, imperfect.

Second, the market is interesting right now. The general perspective is that the strongest startups often had the best cash balances heading into the current downturn, and many of these have not raised any money since. This means there is likely some adverse-selection bias at play in the data. The companies that needed to fundraise and did were perhaps, on average, worse off than the median for their stage. The following data could therefore prove slightly more pessimistic than what we would see if the full range of startups were fundraising today.

Enough of that. Let’s see what the numbers can tell us about the early-stage market in Q1 2023 and what sorts of deals are being signed today.

The data

The seed stage is a bit of an outlier compared to later stages because venture funding for very early-stage startups has remained comparatively immune from the woes of the public market. As a result, pre-money median seed valuations have stayed relatively flat. That was true last quarter, too.