A long-time friend asked why I’m so intrigued by early-stage founders and investing. He’s surprised that I don’t like later-stage investing more because there are more measurable data points. I enjoy helping founders at any stage, but I do like the early stage the most. I define “early stage” as pre–product/market fit, so it includes the pre-seed or even seed stage. Here are a few reasons I like this stage:
- Empathy – I started my own company, so I empathize with the zero-to-one segment of the journey. I don’t think you can fully understand it unless you’ve lived it.
- Turnover – The more I’ve zoomed out, the more I realize that early-stage investing is often transient. Founders moving to the next stage is expected and a great thing. I don’t think people realize that many VC investors move to later-stage investing if they’re successful and raise a larger fund. As the VC investors transition, so do the limited partners that invested in their funds. Given all of this, turnover at the earliest stage of investing is high for all stakeholders. I enjoy helping others navigate this transient environment.
- Impact – Helping founders at this stage can have a massive impact. The right piece of advice or the right introduction can change someone’s trajectory.
- Challenge – It’s a difficult stage to invest in. Many people shy away from pre-seed investing because of its challenges and the high failure rate. I view these as problems that can be solved for.
I don’t think the current VC construct for early-stage investing efficiently deploys capital outside traditional VC networks. It can be improved. I want to be part of that solution.