I recently wrote a blog post on understanding how the size and age of a venture capital fund might affect
you when you’re raising money. Because it is a “series” I plan to
get into some of the deeper complexities of funds such as “cross over
funds” and “why VC’s hate to price their own deals” at a later stage.
The last post was a high-level primer. I know many super experienced
entrepreneurs who don’t understand the basics of how fund size and age
can affect them so I thought it was worth establishing a baseline.
Chris Dixon provided some commentary on Twitter that he believes my last post missed “the most important point about fund size.” He’s specifically referring to his point of view that entrepreneurs shouldn’t take seed money from “big VC’s” (he defines them as > $100 million). It actually wasn’t the point of my post – my point was just to get people thinking about the issues of size and age in the first place.
But I understand Chris’s sentiment and in certain situations I agree. But while he’s directionally right that there are risks, he’s wrong to rule out all VC’s who do seed investing. Yes, I’m a VC who does seed investing so I have a bias. But Chris is a seed investor who competes for deals with VCs so the bias runs both ways. I bet if we discussed the issue live we’d probably end up agreeing more than disagreeing.
To read the full, original article click on this link: Understanding Venture Capital: The Secrets Of Seed Funding
Author: Mark Suster
