Death of The Generalist Seed VC

Leading Funding Rounds Now Requires More Thematic Focus To See, Pick, Win & Service Startups

I’m going to make the case that early stage venture *firms* who want to lead seed/A Rounds can be generalists (in the sense they have a set of GPs who cover a broad set of areas collectively), but that as a VC you, now more than ever, need some degree of focus. This doesn’t mean every partner is so narrow as to invest in just a single type of startup. But it does mean that if you cannot articulate the handful of spaces you are trying to dominate (from an investment returns perspective), you are probably not going to succeed ongoing.

a library of books with a spotlight on one section and an owl reading a book, digital art [DALL-E]

Why do I believe this is now a reality (and I didn’t necessarily when we started Homebrew a decade ago)?

• “Software eating the world” (or my take, “software enabling the world”) means the breadth of problems startups are solving, the range of markets they’re participating in, and specifics of what they’re trying to accomplish during their first few years of operations, are so diverse that you cannot credibly hold evaluative criteria in your head for all startups. You might invest as a generalist but I don’t believe your returns will outperform.
• Similarly, founders of these companies are looking for lead investors who can de-risk their…