My SF learning: Your Seed fund will (probably) miss the next breakout startup.

Deep convos on the ground with founders and VCs in San Francisco, and the signal is crystal clear:

If your fund doesn’t have a dedicated pre-seed strategy, you’re already locked out of the most competitive Series A rounds. The game has changed.

I’m seeing today’s strongest founders aren’t raising traditional Seed rounds. They’re following a new playbook.

The new founder playbook

a. Capital Efficiency: They’re raising just enough ($500k – $1 mn) to get to product-market fit, leveraging lean teams and powerful new dev tools.

b. Blistering Speed: They’re building incredibly fast, hitting meaningful revenue milestones before ever needing a ‘priced’ round.

c. Metric-Driven Graduation: I’ve met so many exceptional teams that reach $2 to $5mn in ARR on a pre-seed raise. The true breakouts are hitting $15mn+ ARR before they even think about a Series A.

The Squeeze at Seed

This creates a massive problem for the traditional Seed or Pre-A investor.

By the time a company with $2-5mn ARR and strong growth lands on your radar, your standard $1-$2mn seed cheque is irrelevant. They’ve outgrown you.

Worse yet, once they cross the $10mn ARR threshold, the growth-stage giants (think a16z, Sequoia, Lightspeed) have built the relationship, and pre-empted the entire Series A allocation. There’s no room left.

After years of VCs telling founders to Pivot, it’s time for the VCs to “Pivot”.

The answer isn’t to abandon your thesis, but to adapt it.

My 80/20 Mandate

Allocate 20% (at least) of your fund’s capital to a dedicated pre-seed program. This isn’t ‘spray and pray.’ This is a strategic allocation designed to buy you one thing: access.

This early, small cheque isn’t just about the initial ownership. It’s about earning your pro-rata rights and, more importantly, building the trust that guarantees your spot in the oversubscribed Series A you would have otherwise (definitely) missed.

Bottomline

The battle for Series A is now won at pre-seed. Your follow-on opportunity is no longer a right; it’s a privilege you have to earn before the company even has a board.

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