Seed Investing: The State of the Union

My belief is that true early stage venture capital (investing in companies that are raising at pre-money valuations between roughly $5M and $30M) is executed best when fund sizes are kept to reasonable levels. You should invest as early as you have conviction and as frequently as you can thereafter to build positions in companies over time. Investi... See more

But I thought a better way of thinking about how we manage our portfolios is to think about it as a funnel. If we do 36–40 deals in a Seed Fund, somewhere between 25–40% would likely see big up-rounds within the first 12–24 months. This translates to about 12–15 investments.

As a founder, the goal then becomes to metaphorically peel each layer of the onion — Each fundraising milestone turning into a set of risks being evaluated and sidelined. The earliest investors become the partners to help figure out what to focus on. Good pre-seed angels and investors are often described as “having taste” for good startups — In tru... See more