More founders, fewer rounds
The number of new founders starting companies in Europe grew 84% between 2016 and 2025, and Antler expects that to reach 112% by the end of 2026. Over the same ten-year window, the number of seed rounds fell 25% and Series A rounds grew just 5%. Only pre-seed kept pace, growing 197%, largely because pre-seed only emerged as an institutional category during that window and started from a small base.
Indexed to the more recent 2021 peak, the divergence is sharper. Founding activity is up 54% through 2025, while pre-seed deal count is down 38%, seed deal count is down 41%, and Series A deal count is down 45% over the same period. The gap between founders entering the market and rounds available to fund them is still widening, not stabilizing.
A 1-in-4 hit rate becomes a 1-in-11
Between 2008 and 2019, roughly 23.3% of European startups that raised a seed round went on to raise a Series A, close to a 1-in-4 hit rate. That figure has fallen every year since 2020: 20% in 2021, 13% in 2022, 9% in 2023, the latest year Antler can measure given how long it takes a startup to reach Series A after its last round.
The bottleneck is sharpest in London, which is also where Europe's record-breaking "Jets and Juggernauts" rocketship companies concentrate: 43% of them are based there. Capital piling into the continent's biggest winners is not lifting the broader funnel underneath them. If anything, UK startups now convert to Series A at one of the lowest rates in Europe.
Good companies are failing the market's own test
Antler identified 27 companies that raised seed rounds in 2021 and 2022, met the two criteria that historically maximize the odds of a Series A (a $2M+ seed round and at least one founder with prior scaling experience), and still haven't converted. They are spread across the UK, Germany, France, and Finland, and across sectors from fintech to edtech to developer tools. It isn't one narrow category being missed.
Run the same test on the seed rounds that funded the pre-2020 generation of unicorns and only 19% would register as an exceptionally large, standout bet by today's inflated dollar figures, the kind of round that would give a company better than a 30% shot at a Series A in the current market. The other 81% would look like an unremarkable, middling seed check today, unlikely to convert. Every single one of them became a unicorn regardless.
Supply, not quality
Antler's own conclusion rules out the easier explanations: this isn't investors getting better at picking winners, or AI-lowered barriers to entry producing weaker startups, or the tail end of the 2021-22 hype cycle correcting itself. It's a simple mismatch of supply and demand. The number of institutional investors actively deploying three or more deals a year at early-stage and Series A has fallen 42% and 45% respectively since 2022. New investors making their first-ever European investment at those stages are down 45% and 54% over the same window. Growth-stage participation, by contrast, has held far steadier, down only 30% on active investors and flat on new entrants.
The funds that backed the last cycle's unicorns are growing into bigger funds chasing decacorn-scale outcomes this cycle, which is the success half of the story. The generation of new, smaller early-stage managers and angels that should be replacing them at the bottom of the funnel hasn't shown up at the same pace. Fewer active backers are trying to screen a larger pool of founders, at exactly the stage where screening for real signal, not pedigree or round size, matters most.
Proof, not promise
With fewer active investors screening more founders, the signal that clears the bar has changed. Koekoek and Helseth describe the same thing from different companies: a repeatable go-to-market motion, unit economics that hold up under diligence, and retention that shows the engine compounds rather than leaks. Growth alone stopped being the differentiator once AI-era companies made fast growth common. What separates the 9% that convert is proof the growth is built to last past the round.
That is the exact gap the Operator System is built to close, stage by stage: a founder-led motion that survives its own handover, unit economics that read cleanly in a data room, and a GTM engine documented well enough that "GTM concerns" never has to be the vague line in an investment memo. The Series A bar didn't move on product. It moved on whether the commercial engine behind the product can be shown to work without the founder holding it together.