3 ms·

Hi Garry, and congrats on your new firm. the age old question comes to mind; how do you value startups with a prototype with little traction. assuming the targ

• garry 10y ago
  At the early stage this is always classically difficult. For both founders and early stage investors, you're balancing dilution vs. percentage ownership. We think buying 5% of the company is the right level for a given seed fund. It's enough to be significant to return the fund, but not so much that you're crowding everyone else who you would want in the round. It takes a village to build a great startup and we particularly like to help founders put together a good syndicate of angels and seed funds, all of whom can help with advice, connections, customers, employees and just general support. It's basically binary whether a company gets to metrics that help it either be profitable or get to a Series A— so that's why at the early stage (all the way to Series A really) most VCs work backwards from percentage ownership. So we write checks of as small as $300K for earlier companies at lower valuation, up to $1M or more for companies later stage. It's enough to either get to the next milestone, or put together a good round. All of the real work happens after the raise, and it's usually a huge relief to founders to be able to get back to work.