Are seed funds dying? Delian flags generational shift as top companies skip early rounds
Jul 21, 2025
Key Points
- Top-tier founders now skip seed rounds entirely, either bootstrapping or jumping straight to Series A-scale funding, collapsing the market that once validated seed funds as a category.
- The word 'seed' no longer signals stage or company age but is applied retroactively to any first or second financing event, regardless of capital raised or valuation.
- Delian Asparouhov's core arbitrage of buying 10-20% of early companies for $1-2 million has vanished as startups either self-fund or raise $55 million-plus rounds where valuations are already set by later-stage investors.
Summary
The seed funding ecosystem in Silicon Valley has collapsed over the past decade, according to Delian Asparouhov of Founders Fund. A generation of top-tier companies now skip seed rounds entirely, either bootstrapping their initial capital internally or jumping straight to Series A-scale funding.
Ten years ago, seed funds felt as important as multi-stage venture firms. Now the category feels dead because the companies that used to validate it—the ones that would raise $1–2 million at seed and go on to massive success—have stopped raising at that stage altogether. Instead, founders either fund the earliest phase themselves or raise $20 million or larger.
The market has compressed into a strange gap. Pre-seed funds still exist and have capital to deploy at that stage. But when those same funds try to compete at what is now called "seed," they are playing in a $4–8 million range at best, or they encounter companies raising $55 million, $1 billion (Board Ape Yacht Club in 2021), or even $2–3 billion (Mirror, Marotti) for their first external round.
The word "seed" no longer signals stage or time. It used to mean a company in its first 18 months that had raised less than $5 million. Now "seed" is a label applied retroactively based on whether it is technically a company's first or second round, regardless of how long the company has existed, how much capital it has raised, or what valuation it achieved. A company might raise a billion dollars and price it like a growth round, but still call it a seed round if it happens to be their second financing event.
Asparouhov's actual complaint is simpler. He used to hunt for cool early-stage teams and buy 10–20% of the company for $1–2 million. That arbitrage has vanished. The companies good enough to build have either raised that cash from their own balance sheet or they skipped the seed category altogether and went directly to larger rounds where valuations and dilution are already set by later-stage dynamics.
Asparouhov has survived this shift better than most and is still known for finding good prices. But the ecosystem that made seed funds collectively important is genuinely gone.