Key Takeaways - The best talent wants to join a company not at the highest price, but at the best price with the right amount of capital for the right risk
- There are three types of seed rounds: Discovery (sub $2m), Classic ($3m to $5m), and Megatron Jumbo ($5m+)
- To win in today’s venture climate, you must get “ball control” in any round that is presented to you
- Be as disciplined as possible concerning your entry price
- “I think AI is the most transformational thing that we are ever going to see in a long time. However, I still think it’s f***ing hard to make money there.” – Ed Sim
- While some people encourage investors to perpetually lean into their investments, sometimes it is best to lean out and strategically sell in increments over time
- Ownership matters, but it must also be balanced out with valuations
- The hardest problems to solve often take longer to solve; businesses working on addressing these problems may appear “slow”, but they might be massive winners in the long run
Read the full notes @ podcastnotes.org
Ed Sim is one of the best seed round investors in venture as the Founder and Managing Partner @ Boldstart, Ed focuses specifically on developer, infra and SaaS at pre-seed and seed round. Over the last decade, Ed has backed some of the best including Snyk, BigID, Kustomer, Front and Superhuman.
In Today's Episode on Seed Rounds We Discuss:
- The Three Types of Seed Round:
- What are the three different types of seed round today?
- Has seed ever been this competitive?
- Will seed be unimpacted by the macro decline we are seeing?
- Why are growth and multi-stage funds being more active than ever in seed?
2. Too Much Cash Will Kill You!
- Why does Ed believe that too much capital can kill companies at the seed round?
- Why does Ed believe that the best founders are not always optimising for the highest price?
- What are the single biggest negatives of taking a high price at the seed round?
- What advice does Ed have for founders who have large offers from multi-stage funds at seed?
3. Is Growth Dead?
- Why does Ed disagree and suggest that growth is not dead?
- What do multi-stage and growth funds now what to see that they did not before?
- How will the growth market evolve over the next 12-18 months?
4. IPOs, AI and M&A:
- What will cause the IPO windows to crack open again?
- Why does Ed believe that many investing in AI are simply giving money to Nvidia?
- Does Ed agree that 95% of the cash going into AI from venture today will go to zero?
- Will we see more or less M&A in the next 12 months?
- How did Ed evaluate the Loom acquisition by Atlassian?
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