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Sep 22, 2023 · 22m · top-founders

Behind The Term Sheet: How this $76m Seed Stage Fund Really Works

Anupam Rastogi · 10m spoken Nathan Latka · 9m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this interview, Nathan Latka speaks with Emergent Ventures partner Anupam Rastogi to unpack the inner workings of a $76 million AI-focused seed fund, covering check sizing, reserve strategies, and deal pacing. The conversation offers founders practical advice on diligence, SaaS valuation benchmarking, and choosing between venture equity and non-dilutive financing.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 45.9% of the talking time here. How this is scored →

Nathan as informed peer 4.6 Guest teaching 2.6 Guest disagreement 1.0 Nathan pushing back 2.0
05100:0010:0020:001:27–5:26 · Nathan as informed peer 6/10 Emergent Ventures Fund Strategy and Pacing Nathan cites public press data regarding Emergent's deal velocity and pacing, while Anupam clarifies why public announcements of early-stage rounds often lag behind actual deployment.5:27–7:50 · Nathan as informed peer 0/10 FounderPath Valuation Dashboard and Data Platform Walkthrough Nathan delivers an uninterrupted mid-roll product walkthrough and promotional pitch for FounderPath's SaaS valuation data tool.7:52–10:33 · Nathan as informed peer 7/10 Reserve Strategies, Follow-On Rounds, and Founder Due Diligence Nathan calculates reserve allocation math live to demonstrate check distribution, and Anupam explains how modern seed rounds are deconstructed across multiple milestones.10:34–12:51 · Nathan as informed peer 7/10 Investment Instruments, Legal Fees, and Ownership Targets Nathan drills down on SAFEs versus priced rounds and deduces the implied valuation cap from Emergent's target equity ownership percentage.12:52–14:56 · Nathan as informed peer 5/10 Venture Return Profiles and Deal Closing Timelines Nathan asks for specific examples behind the power law dynamic in venture, and Anupam outlines the typical closing timeline across domestic and cross-border deals.14:56–17:13 · Nathan as informed peer 6/10 Limited Partner Dynamics and Evaluating Fund Stability Nathan challenges Anupam by asking how a founder can realistically detect whether a venture fund is facing instability or closure when GPs will not disclose it openly.17:14–20:16 · Nathan as informed peer 6/10 Non-Dilutive Financing and Choosing the Right Capital Path Nathan explores how venture investors perceive non-dilutive debt on portfolio balance sheets, leading Anupam to acknowledge that most SaaS businesses should avoid VC funding.20:18–20:45 · Nathan as informed peer 0/10 Episode Summary and Key Fund Metrics Recap Nathan delivers a closing recap of Emergent Ventures' key fund parameters and transitions into housekeeping announcements.1:27–5:26 · Guest teaching 4/10 Emergent Ventures Fund Strategy and Pacing Nathan cites public press data regarding Emergent's deal velocity and pacing, while Anupam clarifies why public announcements of early-stage rounds often lag behind actual deployment.5:27–7:50 · Guest teaching 0/10 FounderPath Valuation Dashboard and Data Platform Walkthrough Nathan delivers an uninterrupted mid-roll product walkthrough and promotional pitch for FounderPath's SaaS valuation data tool.7:52–10:33 · Guest teaching 4/10 Reserve Strategies, Follow-On Rounds, and Founder Due Diligence Nathan calculates reserve allocation math live to demonstrate check distribution, and Anupam explains how modern seed rounds are deconstructed across multiple milestones.10:34–12:51 · Guest teaching 3/10 Investment Instruments, Legal Fees, and Ownership Targets Nathan drills down on SAFEs versus priced rounds and deduces the implied valuation cap from Emergent's target equity ownership percentage.12:52–14:56 · Guest teaching 3/10 Venture Return Profiles and Deal Closing Timelines Nathan asks for specific examples behind the power law dynamic in venture, and Anupam outlines the typical closing timeline across domestic and cross-border deals.14:56–17:13 · Guest teaching 4/10 Limited Partner Dynamics and Evaluating Fund Stability Nathan challenges Anupam by asking how a founder can realistically detect whether a venture fund is facing instability or closure when GPs will not disclose it openly.17:14–20:16 · Guest teaching 3/10 Non-Dilutive Financing and Choosing the Right Capital Path Nathan explores how venture investors perceive non-dilutive debt on portfolio balance sheets, leading Anupam to acknowledge that most SaaS businesses should avoid VC funding.20:18–20:45 · Guest teaching 0/10 Episode Summary and Key Fund Metrics Recap Nathan delivers a closing recap of Emergent Ventures' key fund parameters and transitions into housekeeping announcements.1:27–5:26 · Guest disagreement 2/10 Emergent Ventures Fund Strategy and Pacing Nathan cites public press data regarding Emergent's deal velocity and pacing, while Anupam clarifies why public announcements of early-stage rounds often lag behind actual deployment.5:27–7:50 · Guest disagreement 0/10 FounderPath Valuation Dashboard and Data Platform Walkthrough Nathan delivers an uninterrupted mid-roll product walkthrough and promotional pitch for FounderPath's SaaS valuation data tool.7:52–10:33 · Guest disagreement 1/10 Reserve Strategies, Follow-On Rounds, and Founder Due Diligence Nathan calculates reserve allocation math live to demonstrate check distribution, and Anupam explains how modern seed rounds are deconstructed across multiple milestones.10:34–12:51 · Guest disagreement 1/10 Investment Instruments, Legal Fees, and Ownership Targets Nathan drills down on SAFEs versus priced rounds and deduces the implied valuation cap from Emergent's target equity ownership percentage.12:52–14:56 · Guest disagreement 1/10 Venture Return Profiles and Deal Closing Timelines Nathan asks for specific examples behind the power law dynamic in venture, and Anupam outlines the typical closing timeline across domestic and cross-border deals.14:56–17:13 · Guest disagreement 2/10 Limited Partner Dynamics and Evaluating Fund Stability Nathan challenges Anupam by asking how a founder can realistically detect whether a venture fund is facing instability or closure when GPs will not disclose it openly.17:14–20:16 · Guest disagreement 1/10 Non-Dilutive Financing and Choosing the Right Capital Path Nathan explores how venture investors perceive non-dilutive debt on portfolio balance sheets, leading Anupam to acknowledge that most SaaS businesses should avoid VC funding.20:18–20:45 · Guest disagreement 0/10 Episode Summary and Key Fund Metrics Recap Nathan delivers a closing recap of Emergent Ventures' key fund parameters and transitions into housekeeping announcements.1:27–5:26 · Nathan pushing back 3/10 Emergent Ventures Fund Strategy and Pacing Nathan cites public press data regarding Emergent's deal velocity and pacing, while Anupam clarifies why public announcements of early-stage rounds often lag behind actual deployment.5:27–7:50 · Nathan pushing back 0/10 FounderPath Valuation Dashboard and Data Platform Walkthrough Nathan delivers an uninterrupted mid-roll product walkthrough and promotional pitch for FounderPath's SaaS valuation data tool.7:52–10:33 · Nathan pushing back 2/10 Reserve Strategies, Follow-On Rounds, and Founder Due Diligence Nathan calculates reserve allocation math live to demonstrate check distribution, and Anupam explains how modern seed rounds are deconstructed across multiple milestones.10:34–12:51 · Nathan pushing back 3/10 Investment Instruments, Legal Fees, and Ownership Targets Nathan drills down on SAFEs versus priced rounds and deduces the implied valuation cap from Emergent's target equity ownership percentage.12:52–14:56 · Nathan pushing back 2/10 Venture Return Profiles and Deal Closing Timelines Nathan asks for specific examples behind the power law dynamic in venture, and Anupam outlines the typical closing timeline across domestic and cross-border deals.14:56–17:13 · Nathan pushing back 5/10 Limited Partner Dynamics and Evaluating Fund Stability Nathan challenges Anupam by asking how a founder can realistically detect whether a venture fund is facing instability or closure when GPs will not disclose it openly.17:14–20:16 · Nathan pushing back 1/10 Non-Dilutive Financing and Choosing the Right Capital Path Nathan explores how venture investors perceive non-dilutive debt on portfolio balance sheets, leading Anupam to acknowledge that most SaaS businesses should avoid VC funding.20:18–20:45 · Nathan pushing back 0/10 Episode Summary and Key Fund Metrics Recap Nathan delivers a closing recap of Emergent Ventures' key fund parameters and transitions into housekeeping announcements.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 66.4% · guest 33.6%0:00 · Nathan 66.4% · guest 33.6%3:00 · Nathan 38.4% · guest 61.6%3:00 · Nathan 38.4% · guest 61.6%6:00 · Nathan 88.5% · guest 11.5%6:00 · Nathan 88.5% · guest 11.5%9:00 · Nathan 19.2% · guest 80.8%9:00 · Nathan 19.2% · guest 80.8%12:00 · Nathan 19.4% · guest 80.6%12:00 · Nathan 19.4% · guest 80.6%15:00 · Nathan 23.9% · guest 76.1%15:00 · Nathan 23.9% · guest 76.1%18:00 · Nathan 38.4% · guest 61.6%18:00 · Nathan 38.4% · guest 61.6%21:00 · Nathan 99.7% · guest 0.3%21:00 · Nathan 99.7% · guest 0.3%
Sharpest disagreement ▶ 15:59 Downplaying LP composition risk

Anupam pushes back on Nathan's premise that LP fund composition creates meaningful downsides for founders, arguing fund longevity matters more than LP type.

 Hardest push from Nathan ▶ 16:28 Pressing on how founders detect failing funds

Nathan refuses to accept a generic answer, challenging Anupam to explain how founders can actually deduce if a VC firm is nearing shutdown when the fund won't admit it.

 Biggest teaching moment ▶ 3:21 Explaining announcement lag in seed data

Anupam corrects Nathan's interpretation of public deal databases by explaining that pre-seed and seed investments frequently remain unannounced for months.

 Nathan holds their own ▶ 8:23 Live reserve arithmetic

Nathan demonstrates sharp domain expertise by instantly multiplying the target check size by total deal count to calculate exact reserve requirements from the fund.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Emergent Ventures Fund Strategy and Pacing 6423 Nathan cites public press data regarding Emergent's deal velocity and pacing, while Anupam clarifies why public announcements of early-stage rounds often lag behind actual deployment.
FounderPath Valuation Dashboard and Data Platform Walkthrough 0000 Nathan delivers an uninterrupted mid-roll product walkthrough and promotional pitch for FounderPath's SaaS valuation data tool.
Reserve Strategies, Follow-On Rounds, and Founder Due Diligence 7412 Nathan calculates reserve allocation math live to demonstrate check distribution, and Anupam explains how modern seed rounds are deconstructed across multiple milestones.
Investment Instruments, Legal Fees, and Ownership Targets 7313 Nathan drills down on SAFEs versus priced rounds and deduces the implied valuation cap from Emergent's target equity ownership percentage.
Venture Return Profiles and Deal Closing Timelines 5312 Nathan asks for specific examples behind the power law dynamic in venture, and Anupam outlines the typical closing timeline across domestic and cross-border deals.
Limited Partner Dynamics and Evaluating Fund Stability 6425 Nathan challenges Anupam by asking how a founder can realistically detect whether a venture fund is facing instability or closure when GPs will not disclose it openly.
Non-Dilutive Financing and Choosing the Right Capital Path 6311 Nathan explores how venture investors perceive non-dilutive debt on portfolio balance sheets, leading Anupam to acknowledge that most SaaS businesses should avoid VC funding.
Episode Summary and Key Fund Metrics Recap 0000 Nathan delivers a closing recap of Emergent Ventures' key fund parameters and transitions into housekeeping announcements.

Statements from this episode (11)

Disclosure
Emergent Ventures Targets 22 to 25 Investments From $76M Seed Fund
“Yeah, we are investing out of a seventy-six million dollar core seed fund, and we would do about 22 to 25 investments per fund, and we do a fairly concentrated approach to seed investing, and there's two of us general partners, and we invest the fund over, you…”
Anupam Rastogi Sep 22, 2023 ▶ 2:09
Disclosure
Emergent Ventures Maintains Steady Pace of Five to Seven Deals Annually
“I'd say we've been at pretty constant five, six, seven deals per year throughout this fund. And that's what we have done in the last six months, we've done three deals as well. And last year we did six deals. So we've been right on pace and 20, 21 was about th…”
Anupam Rastogi Sep 22, 2023 ▶ 3:35
Disclosure
Emergent Writes $1.5M Initial Checks, Reserving Up to $5M Total
“Our average check size is about one and a half million initial check, and then up to three to five million over the, you know, over a course of time.”
Anupam Rastogi Sep 22, 2023 ▶ 5:10
Insight
Rastogi: Seed Fundraising Has Deconstructed Into Multiple Bridge and Extension Rounds
“Seed has gotten deconstructed. So the, I'd say it's very rarely the case that a company just does one seed round and then, Go straight to series A. I mean, that of course does happen quite a lot, but in many other cases, the company ends up doing a seed to or …”
Anupam Rastogi Sep 22, 2023 ▶ 9:58
Assertion Not checkable as stated
Legal Fees for a $3M Priced Seed Round Average $20K-$25K
“I'd say for three million dollar round I would have seen everything from, you know, for a price on, you know, 10 K to 50 K. It's a pretty wide range. I'd say somewhere in the 20, 25 K seems to be median.”
Anupam Rastogi Sep 22, 2023 ▶ 10:58
Disclosure
Emergent Ventures Targets 10% to 12% Median Ownership as Lead Investor
“Yeah, we try and target, ah, 10% where we can, again, reflecting our lead investor status. So we are pretty happy to go and form our conviction. And then often, you know, others, we have, you know, there's quite a few folks that like to follow us and join roun…”
Anupam Rastogi Sep 22, 2023 ▶ 12:03
Disclosure
Emergent Ventures Targets Sub-$20M Post-Money Valuations for Seed Deals
“I'd say, yeah, we try and stay, depending on the stage and type of company, we try and stay in that between, 20 post range under that. But yeah, we have, you know, venture is a game of exceptions. So we do have, we see an exceptional founder, exceptional team,…”
Anupam Rastogi Sep 22, 2023 ▶ 12:35
Disclosure
Emergent Ventures Averages Single-Digit Million Post-Money Seed Valuations
“It's a vast majority, we have single-digit million valuation.”
Anupam Rastogi Sep 22, 2023 ▶ 13:57
Disclosure
Emergent Ventures Averages Three to Four Weeks to Close Deals
“Safe rounds, pretty clean. We can do it in as little as a few days, and we have done it. And then in some cases where there's complex, you know, we have quite a few cross geography companies. So all our companies are US market focused, but we have quite a few …”
Anupam Rastogi Sep 22, 2023 ▶ 14:20
Insight
Fund Longevity Matters Far More to Founders Than LP Composition
“I don't know if that has a very meaningful impact on the founder directly. The, what could matter to founders is the fund being around and being prominent over time or not.”
Anupam Rastogi Sep 22, 2023 ▶ 16:00
Insight
Anupam Rastogi: Most SaaS Should Be Built Without Venture Capital
“Venture capital is not, For everyone, I'd say, in fact, for a very small percentage of founders and companies, I'd say a lot of SaaS can be built without venture capital and should be built without venture capital.”
Anupam Rastogi Sep 22, 2023 ▶ 17:55
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