When Startup Funding ‘Booms’ on Paper but Your Seed Round Vanishes

11 Oct 2026 · 1 min

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In this YouTube segment, Leon Eisen, PhD, presents Fundraising Rule 1, warning founders that a rising median check size can be a deceptive signal of market health. He illustrates how the number of early‑stage rounds can halve while the median check jumps, creating the illusion of a “hot” market. Eisen explains that the increase in median checks often stems from the disappearance of smaller, early rounds rather than investors paying more per company. Consequently, he advises founders not to set their fundraising ask based on market median figures, but to benchmark against peer companies at the same stage and with similar backers. The core takeaway: fewer deals with larger checks does not indicate a thriving market.

Chapters

Fundraising rule 1 starts with a number that looks like good news. Bigger average checks don't mean a better market. I've seen the number of funding rounds fall by half in 2 weeks while the median check jumped 46%. That looks like a hot market, but it isn't. The checks didn't grow because investors were paying more for each company. They grew because the smaller, earlier rounds stopped happening. So don't set your ask based on the market median. Compare yourself to companies at your stage with your kind backing. Fundraising rule 1: fewer deals with bigger checks is not a hot market.