May 29, 2023 · 1h 7m · news
Adam Besnivick: How to Invest in Pre-Seed & Seed Stage Companies; Looking Glass Capital | E1020 · 20VC with Harry Stebbings
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this interview, Looking Glass Capital founder Adam Besvinick shares his disciplined approach to pre-seed investing, detail-oriented LP fundraising, and thematic underwriting in complex markets. He highlights the critical roles of investor reputation, structured fund mechanics, and rigorous founder evaluation in building a successful solo-GP venture firm.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 18.2% of the talking time here. How this is scored →
Harry as informed peer 5.4 Guest teaching 3.8 Guest disagreement 2.0 Harry pushing back 4.9
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 48:39 Rejecting Large Seed Rounds for Pedigree Founders
Adam forcefully counters Harry's premise that pedigree founders should raise $5M seed rounds, insisting that raising huge valuations puts a target on their back and ruins operational discipline.
Hardest push from Harry ▶ 32:56 Direct Refusal of Thematic Pre-Seed StrategyHarry directly dissents from Adam's core thesis, arguing that rigid thematic pre-seed rules miss the market alpha found in chaotic, non-consensus startup pivots.
Biggest teaching moment ▶ 7:35 Detailed Portfolio Math and Ownership DilutionAdam educates Harry on small fund economics, breaking down exact basis points at exit, check sizing, and dilution percentages to demonstrate how a 24-company fund returns high multiples.
Harry holds his own ▶ 50:26 Countering on PMF Runway RequirementsHarry uses his deep market experience to challenge Adam's anti-large seed stance, arguing that $5M rounds give founders necessary multi-year buffers to iterate until achieving product-market fit.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Key Lessons from Chris Sacca and the Currency of Reputation | 3 | 2 | 1 | 2 | Harry asks about key lessons from Chris Sacca and queries whether VCs still value reputation over transactional deal-making. Adam clarifies that reputation with founders is non-negotiable, while investor reputation operates under different incentives. The dynamic is respectful and conversational. | |
| Evolution of Mindset and Looking Glass Origin | 5 | 4 | 2 | 4 | Harry challenges the idea of needing to see every deal and questions whether a 24-company pre-seed portfolio is too constrained. Adam walks through the precise math of ownership bips and dilution at exit to justify the concentrated fund model. | |
| Finding Non-Consensus Deals and the Hardest Fund Size to Raise | 6 | 4 | 2 | 6 | Harry expresses confusion over Adam's low entry valuations and questions if $20M is the single hardest fund size to raise due to LP institutional thresholds. Adam explains his strategy of fishing in tertiary tech hubs and targeting small family offices. | |
| LP Relations: Preparing Materials and Advising Founders | 5 | 3 | 1 | 5 | Harry pushes back on Adam's extensive LP data room, warning that document overload leads to paralysis by analysis, and strongly dismisses pre-seed financial models. Adam defends his practice of maximum transparency for LPs. | |
| Underwriting Founders at Pre-Seed Without Data | 4 | 4 | 1 | 3 | Harry shares his own struggle with underwriting pre-seed founders without existing trust or operational data. Adam explains how focusing on founder origin stories and hard regulatory categories helps filter for resilient entrepreneurs. | |
| LP Sourcing, Portfolio Composition, and Creating Urgency | 6 | 3 | 1 | 4 | Harry pushes back on rigid check minimums, noting his own best deal flow came from small strategic checks, and offers tactical advice on driving LP urgency. Adam acknowledges LP urgency is the hardest part of fund management. | |
| Thematic Pre-Seed Strategy & Cap Table Dynamics | 7 | 5 | 3 | 7 | Harry explicitly disagrees with thematic pre-seed investing, citing his own fund's alpha coming from rule-breaking exceptions like BeReal and Linear. Harry also challenges Adam on whether a small check manager can truly lead a round. | |
| Managing Loss Ratios, Risks, and the Solo GP Advantage | 6 | 4 | 3 | 6 | Harry presses Adam again on thematic constraints given how frequently pre-seed startups pivot. Adam defends his solo GP model, explaining that tight thematic boundaries are essential for bandwidth and sourcing efficiency. | |
| The Evolution of Seed and the Current Fundraising Climate | 7 | 5 | 4 | 7 | Harry quotes Ophelia Brown regarding multi-stage funds destroying seed and argues that raising $5M offers crucial runway for product-market fit. Adam vigorously contends that huge seed rounds create unrealistic expectations and destroy operational discipline. |
Statements from this episode (26)
Besvinick broke into VC by persistently cold-emailing Chris Sacca at Lowercase
“Ended up working for Chris Saka and lowercase capital while I was in business school off of a cold email to Chris and then diligently annoying and following up with him until he caved and gave me some work to do basically.”
Besvinick: Reputation is the only asset investors 100% control
“Reputation is the number one currency as an investor that you have control over. The other one obviously is your track record, but you and I both know that To a certain extent that's out of the investor's control. You know, we can hopefully select great founde…”
Besvinick: Looking Glass Fund I was $8.5M+ with $300K-$400K checks
“Fund one was a little over eight and a half million dollars, generally investing 300 to 400 K into pre-seed and very early seed rounds.”
Besvinick: Venture funds under $50M must return fund on one $1B exit
“Fundamentally, I believe if you're investing out of a fifty million dollar fund or smaller, a billion dollar outcome has to return the fund or this job becomes even harder than it already is.”
Besvinick: Looking Glass Fund I averaged ~4% entry equity ownership
“My average ownership was close to four percent on average at entry across fund one.”
Besnivick: $40M–$50M is the minimum fund floor for institutional LPs
“I generally think 40, really 50 is kind of the floor for a lot of those groups.”
Besvinick writes an investment memo for every Looking Glass deal
“I write an investment memo for every single investment I make, even though it's just me reading them.”
Besvinick: Presenting pitch decks on LP calls is unnecessary for VCs
“I don't think I've never walked through a deck on a call. I just, I don't think that's really necessary as an investor in the same way that it is as a founder who has like screenshots and competitors to show and revenue charts. Like I just don't think that tha…”
Besvinick: Pre-seed financial models reveal founder thinking, not future outcomes
“A financial model, if a founder so chooses to have one, It's a great level of insight into what they think the drivers of their business are and the levers that they can pull over time. But ultimately I am fully aware that what I'm underwriting is a hundred pe…”
Besvinick: Building in complex sectors self-selects for resilient founders
“And I think the founders that I invest in and the categories I invest in self-select for uncommonly resilient entrepreneurs. If you're building in healthcare, in climate, in education, even in some of the tools serving small businesses that I invest in, like t…”
Besvinick: Every Fund 1 LP was a prior personal connection
“Every single LP in fund one is someone that I knew personally over my prior You know, years and years in and around the early stage tech ecosystem.”
Looking Glass Capital set $100k and $250k LP check minimums
“Yeah, it was 100 on fund one and two 50 on fund two.”
Besvinick: Hold first fund close at 50% of minimum fund size
“Now my rule of thumb to other founders would be get to 50% of your minimum viable fund size and then do the first close.”
Besvinick refuses small $75k allocations to maintain target fund ownership
“I'm never gonna be like, oh, I got a 75 allocation here. Yeah, I'll do that one. Like I stick to my target check size range. I stick to my target ownership, which is an average ownership across the portfolio.”
Besvinick led 14 Fund 1 deals despite rarely writing the largest check
“Like I said, I was the first yes or the lead in 14 of 24 investments out of Fund One. It's effectively been the case in every investment out of Fund Two so far, and I was the largest investor in only one of those 14 rounds in Fund One.”
General Catalyst and True Ventures accept pre-seed terms set by Besvinick
“In fact, I've had general catalyst, true ventures, tribe, lower carbon that have come in after me after I've said yes and have not altered the terms of those rounds.”
Looking Glass targets $1.5M–$2M rounds at $6M–$10M post-money
“A quintessential round for me would be one and a half to two million dollars at a six to 10 post. That's like down the middle of the fairway, you know, structure for me.”
Besvinick expects 20-30% of portfolio to drive returns, 40-50% to fail
“Ultimately I know that the vast majority of returns are going to come from, you know. 20 to 30% of the portfolio, and I'm comfortable with the inevitable zero or less than one X that's going to make up, I don't know, 40 to 50% of the portfolio, call it eventua…”
Besvinick operates Looking Glass Capital as a solo GP with zero employees
“I'm a single GP. I'm also a single employee. I don't work with anybody else at looking glass.”
Besvinick: Cold inbound deals produced some of Fund I's top performers
“The deals that I've done that have been cold inbound have been explicitly because they're looking for investors that invest in relevant themes to what they're building. And those have been great companies. In fact, those are some of the best companies out of f…”
Besvinick: Founders target investor lists too narrowly by pursuing only famous funds
“They're not broad enough. They're too narrow with who they go out to and they don't actually realize that there's lots of other investors that are not the household name, pre-seed and seed funds. That would be phenomenal investors on the cap table.”
Besvinick: Pre-seed startups must raise 24 months of gross burn
“My general rule of thumb is you need to have at least 24 months of cash gross burn, not net burn. When you raise your around that I'm involved in initially, I assume the fact that they're probably going to overspend a little bit. So it's probably more like 21 …”
Stebbings: 20VC $50k checks are brand-only and come with minimal time
“I've written 50 K checks from my fund, and I say very clearly, I'm just going to be honest, this is like a brand check, and use my name, but time wise, you chose that, not the 500 K offering, and so you don't have as much of my time.”
Besvinick: Venture capital will bifurcate into small thematic funds and behemoths
“What you're ultimately going to see is a very distinct bifurcation of relatively smaller vertical oriented, thematic oriented funds, and then behemoths. And if you're just in the middle, it's very tough to stand out.”
Besvinick: Boldstart is the top pre-seed firm to back as an LP
“I'd go with bold start. I think Ed and Elliot are phenomenal investors. They like me are very disciplined on how they get involved and what they invest in.”
Besvinick: Benchmark remains the standard among Series A venture firms
“Benchmark. They're still the standard in my opinion. As someone who knows what they're good at, doesn't deviate from it, I have a ton of respect for the people that I know personally over there, and I just think they're outstanding investors.”