The time between funding rounds for early-stage startups has reached its highest level in over a decade.
That’s the conclusion of a Crunchbase study of U.S. firms that raised Series A funding and then closed Series B. The median time between funding rounds in 2024 was 28 months — by far the longest since 2012.
The average time between those rounds peaked at 31 months this 12 months, tying it with 2023. To offer you a sense of what the fundraising timelines seem like, we’ve outlined the averages and medians for the past 12 years below.
Large fluctuations in time intervals between rounds
The average wait time between rounds could be longer if not for a handful of AI and other hot sector startups that closed rounds in unusually rapid succession. It’s value noting that several of the largest Series B investments this 12 months went to firms that recently closed a previous round.
The most famous example is Elon Musk‘S xAIThe generative AI startup has closed its largest Series B funding round of 2024 — $6 billion — six months after raising funding in its previous round.
Another distinctive element is Characterwhich develops AI-enabled humanoid robots. The company raised $675 million B-Series in February, lower than a 12 months after closing Series A.
Meanwhile, many startups took longer than average to close Series B funding.
An example is a startup dealing with quantum computers Quantum circuitswhich raised Series B funding in May, six and a half years after raising Series A funding. Another is Bio Qlariseye disease drug developer that closed its Series B round in May, nearly five years after its Series A round.
Still, startups nowadays typically take two to three years between Series A and B rounds. That gives them enough time to invest capital and hit some growth milestones before hitting the fundraising trail again.
Time is running out for startups from the prosperity era
Of course, not all startups that raise Series A funding go on to close Series B.
Some close before they reach that milestone. Others pursue other paths, such as getting acquired, going public, securing alternative financing such as debt or prolonged rounds, or building a profitable business without further financing.
A minority of Series A-funded startups actually raise a Series B inside the next few years. Of the more than 4,400 U.S. firms that raised a Series A in 2020 or 2021, the peak years of enterprise capital funding, just over 1,600 raised a Series B, according to Crunchbase data. 1.
Will some of those boom-era firms proceed to raise Series B funding? Sure. But the odds of that occuring diminish over time.
In our previous evaluation of the “fundraising cliff” concept, we found that it’s rare for the time between rounds to be more than three and a half or 4 years. This is concerning on condition that enterprise capital funding peaked about three years ago, leaving a large variety of startups that last raised a round in 2021.
Because many startups raised unusually large sums during the market boom, it’s likely they’ll have enough money to stretch the time between rounds longer than was typical in the past. Even so, the overwhelming majority will eventually need fresh capital.