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Why We’re Backing Pre-Seeds

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Why We’re Backing Pre-Seeds

If VCs can ever be helpful (debatable) it's at the earliest stages

Yoni Rechtman
Sep 7, 2023
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Why We’re Backing Pre-Seeds

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For the past 18 months I've been focusing more and more on pre-seed, often spending 6-12 months with folks while they’re still in their job before making an investment (of their time and our money).

Here’s why we at Slow are excited about and committed to backing pre-seed companies.

  • Lower prices and higher returns if it works. Duh/obvious but too important to be left unsaid. Moving on.

  • The earliest companies have the most opportunity to get it right and the least baggage making it hard to do so. Pre-seed companies haven’t already committed to strategies, hires, products, etc. They haven’t raised overpriced rounds from annoying board members.

  • VCs don’t add anything to execution (running the biz, shipping, etc) but can be helpful in preplanning and conception (problem selection, formulating hypotheses, etc). So if we ever have anything to contribute, it’s going to be at pre-seed.

  • We want to help really good people underwrite their time the same way we underwrite our capital. The earliest founders can think more clearly and have the freedom to say no rather than fighting every day to make it to tomorrow.

  • The earlier you go, the more it looks like “true venture”: card flips and big bets versus sustaining execution of things which already work/are known. That’s where we think our risk capital is most important/productive

  • More insulated from capital markets whiplash. The milestones to more capital are clearer and we can more precisely define what “winning” looks like, even if that threshold is qualitative

At pre-seed can put all/most of your efforts toward wayfinding, the idea maze, and seeking truth vs cleaning up messes. There’s no path dependence at that stage.

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Why We’re Backing Pre-Seeds

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Why We’re Backing Pre-Seeds

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hunterwalk
Sep 10Liked by Yoni Rechtman

how do you define pre-seed - is it anything that's "first dollar in" funding? a max round size or valuation? What you wrote totally makes sense but i always wonder what a strategy specifically excludes and pre-seed v seed is tough separation (although i always go back to that classic "i know it when i see it" quote about obscenity)

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Ashkan
Writes The Hockey Assist
Sep 7Liked by Yoni Rechtman

great post. this is true pre seed and it needed to be said.

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