Charles HudsonFounder and Managing Partner, Precursor Ventures

Are multistage funds structurally changing seed stage investments forever?

10 Oct 2026 · 1 min

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1:05

Charles Hudson explains how multistage venture funds now write much larger seed checks, acquiring 10-15% of companies instead of tiny signaling positions. This creates a tradeoff: founders get a reputable backer's signal but risk ceding significant control to investors focused on financial returns rather than their long-term vision.

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I think one of the big things that's changed in the way that multistage funds approach seed is in the, like, before times, not only was it spray and pray, it was spray and pray with small checks. It was like, oh, we got $100K from a scout at this big fund, or, oh, we got a $250K check in a $2 million round. And so those firms were also buying relatively small ownership. So maybe to some extent, the signaling argument was at least intellectually consistent. It was like, why would you take a little check from a big fund where their presence on the cap table is going to influence the way people think about your company. Now, at least when I see the multi-stage funds show up in seed, they're buying like 10 or 15% of the company. They're buying a lot. And I think the question is, as a founder, how do you feel about your largest shareholder being indifferent to outcomes that could be life-changing to you? And I think if they're just indifferent, maybe it doesn't matter. If Venky or whoever it is just says, I don't really care if you want to sell this company for $100 million, you have my blessing. I won't give you any more money to get there, but I certainly won't stand in the way. Is that the worst thing in the world if you're a founder shooting for a middling Now come on.