Seed-stage startups, companies that are raising funding at some of the earliest stages, provide a window into what the venture market will look like in the years to come. And since the onset of the pandemic, the seed-funding market has seen some noticeable shifts in overall volume of deals, as well as the places those deals get done.

As the overall venture market has cooled in the past year and a half, the number of seed deals has plummeted, according to Carta, a cap-table management platform for startups. Startups use Carta when they have an equity transaction, like a fundraise, which gives Carta unique perspective on the health of the venture market.

In the last quarter of 2021, there were 880 seed rounds on Carta's platform. In the second quarter of 2023, that number was cut in half to just 440 seed deals.

It's indicative of the broader pullback in startupland, but seed deals have also mirrored a larger venture-capital trend: a geographic shift in where startups are raising capital.

In 2020, 40% of all startup seed-funding rounds took place in California, according to Carta. Through the first two quarters of 2023, California's share of seed deals fell to 31%.

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