Bet big, bet early: Seed stage funding in 2026

Seed Stage Funding in 2026: Separating Hype from Reality in Early-Stage Investment

At Web Summit Lisbon 2025, a panel featuring Mr. Ron Levin (Alumni Ventures), Ms. Catherine Ouellet-Dupuis (White Star Capital), and Mr. Joe Ros (Entrepreneur First), moderated by Mr. Jacob Robbins (PitchBook), explored seed stage funding. Mr. Robbins presented PitchBook’s Q1 2026 data, showing the median US seed deal at $3.3 million, stable for two years, challenging the narrative of widespread “mega deals.”

The panelists largely agreed that mega seed rounds are outliers, often driven by investor FOMO rather than genuine market need. Mr. Levin advised founders not to be swayed by headlines, emphasizing these large deals are rare. Ms. Ouellet-Dupuis noted that substantial funding is only justified for truly massive market opportunities, like her firm’s $1 billion investment in physical AI, but most companies require gradual growth.

A key concern was the potential downsides of excessive early funding. Ms. Ouellet-Dupuis highlighted that “constraint leads to discipline,” cautioning against hiring “shiny talents” unsuitable for startups and stressing that money is a means, not an end. Mr. Ros added that unnecessarily large raises can distract founders from core development and market validation.

Mr. Levin shared his experience with TravelPerk, where a modest $1 million seed round enabled crucial product pivots based on customer feedback, preventing significant capital waste before achieving product-market fit. This lean approach fostered essential discipline and customer focus, proving more effective than chasing large, early valuations.

Ms. Ouellet-Dupuis further explained that high valuations from mega rounds create immense pressure, limiting flexibility for strategic pivots and making future financial projections for successful exits challenging. Mr. Ros acknowledged that while seed investors are often driven by FOMO, certain deep tech areas, like advanced AI model training, inherently require substantial capital (e.g., $10 million+) for credibility.

Regarding the “Goldilocks zone” for funding, Mr. Levin suggested tailoring capital to individual company needs, aiming for an 18-month runway (12 months operations + 6 months fundraising). This allows for achieving ambitious yet realistic milestones, with an understanding that intermediate rounds might be necessary to adapt to market changes.

The panelists also discussed shifting investor expectations, with Mr. Ros noting higher revenue demands for later-stage funding, requiring significant momentum (e.g., over $1 million ARR) for Series A. For founders, Mr. Levin recommended a “go broad rather than deep” customer strategy, prioritizing feedback from many users. Mr. Ros advised “truth seeking,” listening to market signals over rigid initial visions for long-term success.