Stacey Higginbotham writes:

The dollars flowing into seed and Series A deals also dropped to 45 percent of total deal volume, while the average size of such deals increased to $2.7 million.

In January I pointed out that the trends in early stage funding indicated that the Series B rounds were when entrepreneurs were feeling squeezed. VCs were willing to toss money at any deal in the early stages as a way of claiming their territory. However, if those investments didn’t show significant traction, revenue or product development, they weren’t getting their Series B dollars. Venture firms want a Pinterest by the second round, so entrepreneurs should use their Series A rounds prudently.

The hunt for whales at the Series B level concerns Chris Dixon, a co-founder of Hunch who wrote last week:

The problem with this model of Series A and B investing is that, in reality, many of the companies with big hits weren’t overnight successes. Pinterest, OMGPOP, Twitter, and Tumblr were around for years before taking off and all benefited greatly from having patient investors. In the current financing environment, a lot of good companies won’t live to get Series As and Bs and big VCs will pay valuations on hits that are priced to perfection.

Hunch's other co-founder Caterina Fake said something similar:

Social apps need time to grow.

Silicon Valley is strange right now, folks.

Some startups can raise money at any valuation.

Everyone else struggles to find patient investors.

Amazon, Google, LinkedIn, Facebook, Zynga, Evernote, and Tumblr did not pivot.

There's something to be said for conviction and courage of big vision.