There’s a funding phenomena I’m wrestling with these days — the Straight to A. As VC Matt Turck notes, there’s been an increase in startups whose initial round of institutional funding looks more like an A Round than a Seed Round.
Raising $5m+ at a $20m+ post-money, lead by a large multistage VC.
These rounds most frequently occur when it’s a repeat founder with pre-existing relationships to a fund, but we’ve also seen them occur because a company didn’t raise institutional funding until later in its development or because some combination of their fast growth and competitive dynamics mutated what was originally intended to be a seed round.
At Homebrew we’re focused on being “partners of conviction” to founders during the first few years of their companies.
This traditionally means entering at the seed round stage (an initial financing of < $3m, lead or co-lead by us), but we’ve got access to these Straight to A rounds, as well via pre-existing relationships with their founders or the lead VCs.
So what’s a seed fund to do when a “seed” round is $20m?
This question is something we’re wrestling with because in many cases I don’t think these rounds are necessarily right for us or the…
