A record number of first financings — while the money still piles into five deals

PitchBook's midyear update to its 2026 US venture outlook describes an early-stage surge that arrived ahead of schedule. First financings — a company's first recorded venture round — are on track to exceed 7,000 this year, more than 1,300 deals above the previous record. PitchBook gives two reasons: AI's compression of company-building costs, and the deepening participation of megafunds at seed and Series A.

Set that against the Q1 2026 PitchBook–NVCA Venture Monitor: the quarter's five largest deals — OpenAI, Anthropic, xAI, Waymo and Databricks — took nearly three-quarters of total venture investment. The report calls that concentration unprecedented in modern venture history and notes a widening valuation premium between AI and non-AI companies. In the same quarter, early-stage and first-time financings were described as steady but relatively subdued.

A record in deal count, not in money per company

The two data points only clash if you treat venture as one market. It has split. At the top, venture-growth deployment hit $274.2bn through May 2026, more than double the whole of 2025 — most of it flowing to a very small group of frontier-model companies. At the bottom, the count of companies raising for the first time is surging because the cost of starting is falling and because large funds want early option value.

The danger for founders is drawing the wrong conclusion from the headline. Crunchbase recorded roughly $300bn of global startup investment in Q1 2026 — a record — but most of it came from very large late-stage rounds. A bigger total does not mean a better probability for an ordinary company.

Seed rounds got bigger and harder at the same time

Crunchbase describes a seed market that is bigger than ever and harder to get into than ever. Per investor commentary cited in Crunchbase's analysis, a US seed round now typically runs $3m–$8m, sometimes to $10m, at post-money valuations of roughly $20m–$50m, while deals below $3m are generally counted as pre-seed. The number of companies receiving cheques is not rising in step with the dollars.

More important than round size is the graduation rate. Carta data shows 30.6% of companies that raised seed in Q1 2018 reached a Series A within two years, versus roughly 15% for the 2022 cohort. A larger seed round with a narrower Series A door means the expectations loaded onto each seed dollar have risen sharply.

What megafunds are doing at the seed table

PitchBook names deepening megafund participation at seed and Series A as one of the two engines of the first-financing boom. For a multibillion-dollar fund, a seed cheque is the price of information and an option on the next round, not a material bet. The consequence for founders: your first valuation may be set by an investor for whom you are not a core position, and if that investor does not lead the next round, the market reads it as a negative signal.

This is why a high first-round valuation is not always a win. With the AI/non-AI valuation gap widening, as PitchBook–NVCA notes, a non-AI company priced on AI comparables will have to raise its next round on operating results, not narrative.