Understanding a VC’s Seed Funding Policy is Critical

There has been much discussion about VCs doing seed funding in the past year.  I’ve written about it myself (Is VC Seed Funding Dead?) and (Is There Really a Signaling Problem with VC Seed Funding?).

Short summary of my posts:

1. There is a structural reason that VCs are investing at early stages,
2. Many (Union Square Ventures, Foundry Group, True Ventures, GRP Partners, Mike Hirshland at Polaris Ventures) do it the right way – we treat it as a normal investment and we don’t have a “options” strategy with our investment.  I’ve done
   
3. Many firms do it in a way that can be more detrimental to entrepreneurs.  They either do too many seed investments (for which they can spend no quality time with any) or they treat it as an option (“if you succeed come back and see us and we’ll match any term sheet you get”) – they view it as a sort of “right of first refusal.”
4. seed investments in the past year and they are 100% referenceable.

To read the full, original article click on this link: Understanding a VC’s Seed Funding Policy is Critical | Both Sides of the Table

Author: Mark Suster