Charles HudsonFounder and Managing Partner, Precursor Ventures

Is the seed stage graduation rate destined to plummet?

24 Jun 2025 · 0 min

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Charles Hudson discusses the prospect that the average seed-stage "graduation" (companies progressing beyond seed) rate will decline because many seed firms have abundant capital and overestimate their performance (a Lake Wobegon effect). He questions what a lower average means given a theoretical ceiling of 100% graduation and notes statistical overconfidence among founders/VCs.

To me, it seems inevitable that we're going to go to a world where the average rate of graduation is much lower because there's a lot of seed firms with money, and it's Lake Wobegon, and everybody thinks they're better. As Hadley Harris from the reason you think you're better than average. And statistically, half of us are wrong. The real question is like, well, what's the ceiling on graduation? If averages come way down, and I think the ceiling is still 100%, there will be some people who get every one of their companies through seed. The question is, but what does that mean? Because it's not getting.