Global VC investments for 2015 have already passed 2014, but seed stage continues to fall

While the latest numbers on global venture capital investments are mostly cheerful, they also hint at trouble on the horizon.

According to the Q3 venture capital report released today by CB Insights and KPMG, $37.6 billion was raised in 1,799 deals. That’s compared to $20.6 billion across 1,977 deals for the same period a year ago.

Overall, global funding of VC-backed companies hit $98.4 billion for the first nine months of 2015, compared to $88.7 billion in all of 2014. But, at the current rate, the report projects that the total number of deals will fall short of last year.

Bottom line: The biggest companies are getting even bigger deals. But if you’re looking for that initial funding, things are getting tougher.

“All in all, Q3 was a quarter for big, big deals,” the report said. “Less so for seed-stage and Angel financing, both of which were down for the fifth consecutive quarter on a global basis.”

In the U.S., all the talk of early stage funding didn’t have as much impact as you’d expect. According to the report, seed stage investments represented only 23 percent of all deals, in the fifth straight quarter of decline.

Instead, there are more big deals. And those big deals are getting bigger. It seems rather than taking more risk, investors are rushing to back proven winners.

The report noted that the “number of mega-rounds” (more than $100 million) hit 170 in 2015, including 68 in the third quarter. That is compared to just 28 in the same quarter a year ago.

The result, of course, is more and more unicorns. In the last quarter, there were 23 new unicorns minted globally.

“Everyone is chasing really large deals,” said Francois Chadwick of KPMG in the report. “It’s the herd mentality. Those that are coming in late suddenly feel like they’ve been left out, not invited to the party, and they now need to buy the really expensive ticket to get into the party.”

There are two looming problems.

First, the continuing rise of unicorns seems unsustainable. Surely, not all of these companies are going to achieve the exits to justify their valuations. The tech IPO market is quietly dying off. And Google and Facebook can’t, and won’t, buy all of these companies.

Second, it’s troublesome to think that people will have a tougher time getting funding on the front end. The next generation of Ubers have to start somewhere.

They represent the highest risk, of course. But isn’t that supposed to be what venture capital is all about?