The Numbers
8,625 US startups closed their first venture round through Q3 2026, per PitchBook. That beats 2021's full-year record of 8,507, with three months still to go. Total first-round capital hit $34.3 billion, tracking toward 2021's $40.7 billion record.
Meanwhile, only 211 emerging fund managers closed a fund through Q3, down from 927 in 2022. Andreessen Horowitz alone raised $23.8 billion this year, roughly equal to every non-megafund in America combined.
The Squeeze
Median pre-seed pre-money valuations tripled from $4M in 2020 to $12M today. Median seed pre-money sits at $18.3M, up from $16.0M last year. But the median seed check fell from $3.4M to $3.0M, the only stage where deal size dropped.
Do the maths: a $3M check at an $18.3M pre buys 14% ownership. Last year it bought 17.5%. Smaller checks, higher prices, less ownership, at exactly the moment there are more companies to choose from than ever.
Series A rounds now cost a median $17.4M. Small funds that lead a $3M seed cannot defend their position in a round that size.
Why This Matters for Sales
Funds between $100M and $500M made up 17% of funds closed before 2021. In 2026 they are 10%, the lowest PitchBook has recorded. For sales professionals considering VC-backed startup roles, this consolidation means fewer small funds writing cheques, which translates to fewer early-stage companies hiring.
The 82.7% of US venture dollars that went to AI in 2026 suggests where hiring will concentrate. If you are an AE targeting early-stage prospects, your addressable market just got more competitive and more concentrated in AI verticals.
The New Playbook
Smaller VCs told PitchBook they now focus on founders before incorporation: university networks, repeat founders, accelerators, startup studios. Rob Biederman of Asymmetric Capital Partners called the market "almost comically competitive."
For go-to-market teams at small funds, this is a distribution problem. You need pre-company formation access, not post-incorporation outreach. That means community presence, founder education content, and recognizable investor brand before a startup appears in Crunchbase.
Net cash flow to LPs has been negative by $202 billion since 2022. Until distributions improve, expect fewer small funds, more megafunds writing seed as options, and a tighter early-stage hiring market.
ANZ Context
PitchBook's Singapore office covers Asia-Pacific data, though detailed ANZ breakouts are less granular than US figures. Australian early-stage fundraising typically tracks US trends with a 12 to 18-month lag and smaller absolute numbers. If small US funds are getting squeezed now, expect similar pressure on sub-$50M ANZ microfunds by mid-2027.