BoxGroup’s Post

There is so much BS and perceived conventional wisdom in seed investing. "It is a stupid rule to not invest in uncapped notes." "Reserves are bad for returns." "Signaling is BS and does not exist". "You need to be price insensitive at seed". Today with David Tisch and Terrence Rohan we debunk the biggest BS myths and "wisdom" at seed. My Top 8 Takeaways: 1. The Best Founders Do Not Need Their VC’s Help: The success of a company is dependent upon employees 1-10, 10-100, and the founders. That is what will make or break a company. The investors, advisors, mentors, coaches is an amplification of what's naturally being built internally. 2. Signaling is BS and Does Not Exist:  No one expects the multi-stage fund to do all of their Series A’s if they bought enough in the seed. Everybody wants to move quicker than their competitor. Signaling doesn't exist. 3. Reserves are Bad for Two Reasons: It depresses DPI. With heavy reserve models, you become more of a growth fund. It impacts the purity of the relationship with the founder. 4. Why Voting is Dangerous in Venture Capital Decisions: We don’t vote and we don’t look for consensus. The easiest thing is to find a reason to say no. The magic is in squinting and seeing the one reason it might work. Voting discourages this. 5. Why You Should Invest in Expensive Seed Rounds: The art of VC is to invest in the best companies. If the best is raising $10M on $100M and you say no and it turns into a $100BN company, that is a mistake. You can’t say no to the potential of it being $100BN. 6. We Want to be the Favourite, Not the Best: The best is investor is “name the things they did for you”. The favourite investor is “I would work with them again because they are a friend and I like them.” 7. Biggest Misalignment Between VC and LP: What we sell them vs what we sell founders. Sell to LP: Buy 20% of company and take board seat. Sell to founder: Lower ownership demand and no board seat. 8. Why Seed Investors Should Do Uncapped Notes: I will invest in uncapped notes. We should not have stupid rules. My job is to invest in the best companies. If we invest today we are investing at the best and lowest price possible. (Link in Comments) #founder #funding #business #investing #vc #venturecapital #entrepreneur #startup #seed #funding

There are countless things to love about SF, particularly the impressive technical talent and determination of founders. That's why we've partnered with Liz Wessel, a friend who made the move from NYC to SF, to organize a dinner for founders who have also made this transition in the past few years. If you're one of them (or know someone who is), we would be thrilled to have you join us! While we can't promise the best pizza or bagels (we all know that's in NYC), we guarantee it will be a fantastic time :-) https://lnkd.in/emxhF_AX