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Why Prominent Seed Firm SV Angel Will Not Raise a New Fund

June 1, 2018, 2:28 PM UTC

SV Angel, the prominent seed stage venture capital firm, will not be raising a new fund from outside investors. Ron Conway and his son Topher, who manage the firm, said they will be investing their own money in startups from now on.

The Conways will continue to use the SV Angel brand going forward, but they will be cutting much smaller checks — to the tune of $25,000 to $100,000 per company.

The firm had raised $53 million for its latest fund in late 2016. It will now part ways with partners Brian Pokorny, Kevin Carter and Robert Pollak, who will reportedly remain advisers to SV Angel.

Founded in 2009, SV Angel was one of very few seed funds, and it made early bets on Facebook, Twitter, and Airbnb. But now, SV Angel is competing in an increasingly crowded and competitive market flush with capital. The firm wrote in a Medium post:

Today there are thousands of firms and individuals investing in seed rounds. Seed investors are raising larger funds, becoming more ownership-focused and investing primarily on adoption and traction. Seed investing now encompasses both backing founders at the earliest stages of a company and investing in teams with early-adoption. The amount of money raised in seed rounds has doubled and valuations have increased significantly.

Again, this doesn’t really come as a shock. As Fortune has pointed out time and time again in the past year, the seed stage has become increasingly crowded, competitive, and expensive. VCs are raising larger funds, writing bigger checks, and inflating already-inflated startup valuations. Put simply, it’s getting expensive to invest in companies whose seed rounds are really the equivalent of Series A rounds.

According to PitchBook, roughly two-thirds of the deals they analyzed in 2017 were between $1 million and $5 million, while only about 5% were between $500,000 and $900,000 — which was once the typical range for a seed deal.

In January, we saw Arena Ventures, the Los Angeles-based early-stage venture capital firm, say that it would pause seed investing “until the seed market corrects.” Arena managing partner Paige Craig sent out a private letter to LPs laying out concerns about the seed market — overvalued seed companies, excessive capital supply, and imbalanced market forces.

Two months later, Craig halted all seed investing through the fund and joined electric scooter company Bird as its head of U.S. city operations. Bird is actually a beautiful example of this trend — a company that raised $3 million in seed funding last June, $15 million in Series A in February, $100 million in Series B in March, and another $150 million (at least) in May. And BAM, in less than a year, we’ve got a scooter unicorn on our hands.

Everything is bigger in 2018.

This article originally ran in Term Sheet, Fortune’s newsletter about deals and dealmakers. Sign up here.