Afore Capital

“When we started Afford 10 years ago, this year will be 10 years for us pre-seed, which has now become a category, was not a category back then. You know, it was actually a negative term, right? It was reserved for founders who could not raise a seed round, and…”

“So with high touch, when we invested in them, believe it or not, it used to be called carry travel.”

“In most cases, it's 10 plus years, right? And I think founders have to really, you have to be, you have to believe that the founders want this to be their last job, right? If this is working well, this, they're just going to keep, keep going with this versus l…”

“My co-founder used to be on the board of their previous company called Paribus. So, and then the founders of ramp were actually one of our first LPs in fund one.”

“And then I believe like a year later, they came to us and they said, Hey, we're starting this new company called ramp. Obviously we loved them. We thought very highly of them. And the idea was interesting as well, but given the repeat founders their first roun…”

“So now we added what we call a non-core bucket, right? These are investments that we would have loved to make them core, but for whatever reason, it's out of spec. It generally is because of deal terms. It's out of spec, and it's usually repeat founders, right…”

“The moment you become multi-stage, your focus shifts, and you're not able to do justice to that zero to one journey”

“The founders of Solana when it used to be called Loom Protocol, believe it or not, we're actually in this office here that you're sitting in today. I think the first round might have been at I don't know, the high single digit post money, maybe low double digi…”

“They're really deep in the details. You know, they're not top-down thinkers where it's like, well, you know, the McKinsey study said this market will be big, so that's what we're getting.”

“One of the questions we ask is just, like, walk us through the, like, the last six months, right? How many customers have you talked to? What have you learned, right? How's the product changed? How's your thinking changed? Because again, I'm trying to extrapol…”

“It's a weird like dichotomy, right? Because at some level you want them to go search for the truth and not be happy ears. At the same time, you need to be outrageously optimistic to build a business, you know, because it's going to suck along the way. And for …”

“I want them to be able to convince people who in a rational world would not be joining your company to be able to join your company. Right. Because you're going to pay them less. You're going to make them work more. There's more risk with this company, but the…”

“The biggest mistake I'd say we probably made is like fell in love with the idea, right? Where, where it's almost like you think, like, if I was building this company, I would, I think it's gonna be really big, but the reality is we're not building the company,…”

“A lot of the deals, we debate them internally a lot, and as long as one person is excited about it gets done. It doesn't have to be a consensus deal. No, only one person on the team has to get really excited, and obviously my co-founder and I you know, can do …”

“A company comes to mind called Koala that we invested in repeat founders, I believe, on a segment that was a pretty expensive deal for us to get into. They were doing well, they raised a series A, and then they actually got acquired by Cursor, and we got Curso…”

“I get more deal flow from founders who I have said no to, who I passed on, than founders who I've invested in, right?”

“I was a seed investor in Firebase back in 2012. They sold out to Google. It was a great outcome for us, but also More importantly, became one of the most used developer tools in the world. And they helped really build that inside of Google. Then they spun out …”

“90% of our capital always comes from existing LPs. And frankly, there's always demand to do the whole fund, but we cut them back because we always think it's good to build a couple of new relationships in each fund cycle.”

“We spoke with them on Tuesday, got the term sheet on Thursday.”

“In fact, you know, a four accounts were about 40% of capital that has gone into funds exclusively focused on pre-seed.”

“I think it happens much less frequently than the media may make it up to seem. Mostly because when that happens, it becomes news. Hence, we all hear about it, and it makes it feel like that is what is happening day to day. But the reality on the ground is, for…”

“In a prepared mind for a Series A fund, we certainly see those rounds getting preempted, and maybe those rounds are getting done sooner than they would have five, 10 years ago, and they're getting done at a price higher than those companies probably deserve.”

“We think there's more variance on the problems that companies face across stages and phases of the business than there are across sectors.”

“And our graduation rate's been upwards of 86%, and it's because we're able to do this diligence to really figure out, can the company get to the next stage?”

“Our average primary check is just over one percent of the fund, and we think that's a good number because it allows us to get meaningful ownership, it's meaningful to the fund, but it also allows us Take a lot of risk.”

“We consider each check we write, even in existing portfolio companies, as a new investment. So we run a very similar process where we will put together a memo and really try to understand, is this, if we were to have a blank slate, would we invest in this comp…”

“And this is where we recommend to founders, like, look, you should raise somewhere between half a million to million dollars, which we think is the right balance between having enough to really be heads down and execute for, let's say, 12 to 15 months. But at …”

“And the way we operate is we make a list of key questions we have to answer in the diligence process. And these are basically things that need to go right for this company to get to the next inflection point. Not necessarily for this to be a massive business.”

“In my opinion, best companies will either expand or shrink the market in ways even the founders cannot anticipate at the pre-seed stage.”

“And this is, I think, also where it's tough for multi-stage investing firms, frankly, to invest at this pre-traction stage, because what the company looks like is very different than when you look at it as Series A. And I think it's easy to fall in the trap of…”