Seed Stage

“I mean, the scale of how much you have to win, right, is different based on your price. It's pure math. So, uncapped notes suck at the seed stage.”

“I predict if it sticks, the shorthand version of the seed stages will be, does this conform to the Y Combinator revenue guidelines, right?”

“The seed stage is the hardest stage at which to invest, because it's easy to make one great seed investment, but it's hard to have a system, I think, for doing great seed investing, because there is, even when the people are amazing, There just isn't anything …”

“When you look at the data, yes, there's more capital being invested, but the number of rounds at seed stage for us this year is actually going to go down.”

“I mean, we're all seeing this at the seed stage, right? Like it's a tale of two cities. Like it's very hard to get anything funded. That's not got AI in one of its slides.”

“Especially at seed stage, you know, our approach to seed is, is much more collaborative. You know, the idea is we don't want to compete with people like you and, you know, and other, other seed funds and angels, you know, we want to bring them along, we want t…”

“Seed to scale, you know, somebody told me, ah, ah, your goal versus whatever realistic thing, ah, you can have a hundred percent margin at seed. You know, you can have like, 75 at A, you know, 50 probably at B. By the time you get to C, it can't be like, you k…”

“We start building the relationship in the seed. We won't invest, but we'll start building rapport with the founder.”

“Every round we raised, we probably had 50 no's, like, literally 50 to a hundred no's every single round. Seed stage, A stage, B stage, C stage, every single round, 50 to a hundred no's”

“Seed stage round primary median valuations for a seed stage round on Carta were fifteen million. In Q four after being 14 and a half in Q three and 14 in Q two. So rising up, that's pre money.”

“I have this like theory that like, maybe you shouldn't hire any salespeople until series A. Right. Because seed is all about experimentation and proving out that experiment. And then obviously series A is about, you know, exploiting that learning, but I see so…”

“You don't require three, four months of work to invest in a seed stage company.”

“I actually just read a Carta report today. I don't know if you saw it, but the graduation rate from seed to Series A is now at an all-time low, and before it was like in a normal year, they'd say like, 20 to 25% graduation rate. Now it's at 13.”

“And the best companies, if you look at it, were insanely expensive at SEED, insanely expensive at Series A, insanely expensive at Series B, and so on. It's, you know, it's like almost part of their DNA to be expensive companies.”

“The vast majority of billion dollar companies start off with niche markets, which is why for me as a VC, like Tim is just not all that important. Honestly, like I do look at back in the envelope really quickly. Could this in theory become big? And that's like,…”

“If you fund a generational company and the outcome is insanely enormous, you should say yes to whatever that number is at the seed stage.”

“No, at seed I don't think so. I think it distorts everything. Everything from the go-to-market model to how you hire, to the offices and the culture you're creating, it's all wrong. I, so I completely disagree.”

“Most seed rounds were very roughly in the four to five million range at around 10 to twenty million pre.”

“At the seed stage, as you can see here, approximately half of them were pre-revenue, while the other half had some ARR, anything between just a couple of 100,000 dollars Up to about a million or even 1.5 million.”

“So I, I'm no longer convinced that seed is particularly like a bargain in terms of that part of the market. In fact, I think probably Series A or Series B is a better place to invest.”

“We just haven't seen a lot of correlation between the folks who are like really great at raising money at the seed stage and the folks who are really great at building a business and the people who are really great at building a business, they get pretty good …”

“Pricing has slowly started to correct, but it still hasn't corrected at the seed stage.”

“I think the A is where the elbows are sharpest. Seed, you get a lot of people coming together. Growth, you get a number of people coming together.”

“If you're approaching that seed stage, median employees around 16, series A, 36, 82 for series B.”

“A lot of, like a lot of naive entrepreneurs feel like they've won. They pop a bottle right on the night that they, that the funds wire for their seed stage, not understanding that they're now obligated to a bunch of investors to work their ass off, to build so…”

“Yeah, it doesn't exist, right? Like quite literally you're starting with nothing. And so I think that it is a like I think investors are wrong to look for it. What you are investing in is trajectory, right? And the ability for founders to navigate a market and…”

“In today's market at the seed stage in particular a hundred million dollar fund is a bit of a tweener. You've either got to be larger to be able to write large checks and get the ownership that you need in order to win the best opportunities and deliver the ty…”

“On a seed deal, you know, like we would like to get like the 10% ownership of the company as sort of a minimum. And so that's, I think like sort of a million dollars would be minimum check size.”

“I don't think anybody can see that something is going to be, or they can say they've got their thesis and I, you know, whatever, but like, I don't think you can predict a hundred billion dollar companies at the seed stage. That's silly, but you can predict, He…”

“At the early seed stage, I would say folks are about half as active as they were 60 days ago.”

“And I think we're going to see the migration of capital from growth to super early, and then actually price inflation at the seed, like we've never seen it before, ironically.”

“It's really, really early at the seed stage. You have a, maybe a product, a team or an idea, maybe you have a demo, but you're mainly going off of a narrative that people get excited about. And so people bid that. And that's the market price that you pay. So i…”

“For first two, three years of venture more than money our portfolio companies need a lot of time and that time where investor need to help them on PMF what should be how to focus on the right TG and what should be our North star metric.”

“One thing that we heard constantly from entrepreneurs in those days is it turns out that the Capital's not the scarce resource. It's the time and the engagement. And so surmounting that engagement hurdle, I think, is one thing that's really challenging, and I …”

“In venture, what we're doing is we're already buying long dated way out of the money options. And by investing in the seed stage, a lot of these guys, whether they admit it or not, are basically buying option portfolios”

“The thing that has always attracted me to the seed stage has been that there's no beta in going from zero to one. That's all alpha.”

“At the seed stage, we often say we're not investing in a company because a startup isn't a company. It's a set of insights. It's a development of a set of secrets that you have.”

“When we refer to seeds today within Lightspeed, they look a lot like what we used to call Series A's 10 years ago. We've just almost shifted everything to the right one.”

“So our view is that it's nearly impossible to pick winners at the seed stage. There's a lot of memory, I guess you'd say, and hard won battles that, that help guide our decision. But at the end of the day, We are humble enough to know that it's impossible to p…”

“At the seed stage where we play, rarely do we know we have product market fit. So it's a lot of customer exploration. A lot of talking to customers, some early customer trials, some indications that the product does what it says it's going to do, and we explor…”

“So in my opinion, at least, seed stage is definitely too early to start measuring CAC and LTV, but they're still super important to keep in mind.”

“I think if the companies at seed stage have adequate runway, then that runway should last them longer because the cost of doing business should go down, right? So the cost of hiring will go down. Also rental should go down. So, you know, if you needed a millio…”

“If you think about the seed stage, right, they're really buying the founder when the investor invests. And when you think about the late stage, they're buying mostly a business, right? And then it's definitely some founder, but mostly a business.”

“If you're trying to value invest at the seed stage, it's kind of a silly exercise. So I think that like optimizing between a six cap and a 12 cap is really like, I just don't know that that's going to be the right way to invest. I think you're just kind of lik…”

“And I think too often having a formalized board, an investor led board during the seed stage brings a lot of the trappings of From the post-series A board dynamic into the seed stage, where there's some degree of formality, there's a fair amount of preparation…”

“The company has, but I think at the seed stage, I would look for a minimum of 18 months. Today, I prefer two years, actually. So, sort of seed and series A investing.”

“I think it's very hard to be thematic at the seed stage. I think generally by the time you can identify a theme at the seed stage, it's probably too late.”

“Product is probably the last thing I worry about when I think about product, especially at the seed stage or what the early vision of a product is. That helps you understand how the team thinks about the space as opposed to sort of being, you know, the thing y…”

“At the seed stage, we don't take board seats.”

“Generally the valuations are within a tight band. So there's usually anywhere from three to ten million dollars for free money.”

“I think today it's the, you know, almost the opposite of a good time. I think there's just so much capital in the seed stage.”

“The thing that I think matters the most in startups of getting from sort of seed stage to A is time. I've never met an entrepreneur who doesn't say, God, if I just had another six months, right? Because time's the thing that kind of bites you in the ass every …”

“And I think the key to successful fundraising at the seed stage is really establishing that emotional resonance with an investor. And there's really only two means by which to do that. One is the personal story of the founders, right? Why it is they're focused…”

“I'd say A and B are particularly tough because at the seed stage you're investing and you're usually investing on the promise. At the A and B, you're trying to invest on more of the reality, and the reality has to stand out from everything else that those inve…”

“You know, the rule of thumb here is you want to have at least a 10 X, you know, path to, for the winners. And I think that's actually low, especially at the seed stage.”

“I think in the seed stage, it's very difficult to do that because in the seed stage, as I mentioned before, you probably want to be more involved with the company you want to meet the founders you know, maybe not every week, but certainly every month and there…”

“It's far and away the best thing they could do at the seed stage.”