Multistage venture funds are writing much larger seed checks, now taking 10-15% ownership instead of tiny signaling positions. This raises a founder question: when your largest shareholder is indifferent between a $100M exit and something bigger, does that limit your ambitions?
Chapters
I think one of the big things that's changed in the way that multi-stage 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.
