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Taking the pulse of the seed market in the Northeast

Kirti Levy of Techstars I know a thing or two about where seed funding is in the Northeast and where it is going.

During a presentation at TechCrunch’s Early Stage in Boston last month, Levy took a brief look at deal counts and valuations before digging in more depth to see what hinders funding right now, and what expansions are giving founders to cut. Will happen. a deal.

From 2021 to 2022, total deals in the Northeast were down nearly 25%. This may not be surprising, but it is quite stark. If you take a look at seed funding specifically, things contract even more.

“Even if you exit this quarter, even if we have a second half of the year, I’m afraid the deal count is looking bad,” he said.

In the first quarter of 2023, the majority of investment in New England occurred in the productivity, business productivity, software, health care, climate, energy and fintech sectors.

But in Levy’s opinion, founders seeking investment are expected to jump through a series of hoops to reach a pot of money that has shrunk in size.

“In 2021, you’ll go through this list of things to think about,” Levy said. “Traction: Check. Founder/Market Fit: Check. That was the attitude of investors at that time. But this time, what we are seeing is real, really hard, due diligence and even with investors There’s been hurdle-jumping through some meetings. And I think it’s because investors have money to invest and they want to spend it, but they want to spend it on companies that have a proven track record of success. Best chance to.

While investment may be down overall, there is still a lot of buzz around companies that get through all the hoops.

“As always, there’s a little bit of FOMO,” Levy said. “So the companies that are checking those boxes heavily and making it through that diligence, those are the ones you’re hearing the valuations for, they’re still out there.”

The odds are high.

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