Ed Sim: Why Seed Has Never Been More Competitive & Why Pricing Has Never Been Higher | E1076

The point is, the three rounds are there's a discovery round, which in my opinion is less than 2 million. So it's usually, like maybe a first-time founder exploring a new market. They'll graduate to the next round, which would be a classic. And a classic round, in my opinion, would be three to five million. And finally, this is the Megatron jumbo round, greater than five. It's usually six to $10 million round, and it's almost always a seasoned founder with a prior exit. So when multi-stage firms see opportunities like this, they wanna supersize it. (laughs) And they say, "You know what? Instead of raising four or five, why don't you raise 10, and I'll give you the whole thing?"

Ed, I am so excited for this, my friend. We haven't done this in a long time. We planned, the world keeps on changing, but fuck it. Let's do it now. So thank you so much for joining me today.

(laughs) I love it. Thank you for reaching out, and I'm glad it worked out. I know we've been planning this for a while, and I think this is number three on your show. It's been spread out over many, uh, epics, uh, I would say.

I mean, many, many epics. We just discovered that your year of entry into venture was my year of birth. Uh, and s- sorry. I'm age-

(laughs) Oh, geez.

Uh, but I- I- I- I ... There is a reason for that. I just want to start with some context before we jump into the seed landscape.

Yes.

People that don't know you and Bold Start, bluntly, who are you and what do you do?

I call ourselves an inception investor. And in my opinion, uh, the world has gotten way too complicated with pre-seed, seed, and what have you. So we love partnering with founders when they have their idea, helping them iterate and battle test their ideas, helping them pre-sell their hires, and having them be armed and ready at incorporation, and leading that round from the very beginning. And those rounds can be anywhere in size. I mean, you're talking about it could be a few 100K in size. It could be up to 10 million in size. I would prefer your classic structure of three to $4 million, to be honest with you, but sometimes there are some opportunities you just can't let get away. (laughs)

Okay. We sai- we said this would just be a chat. Is that not just pre-seed, dude? That's what pre-seed always was.

I think pre-seed presupposes that you need a see round- seed round. And if you look at kind of the data, frankly, uh, I just did an analysis on PitchBook. The data is skewing upwards. Did you know that the median age of a company that raises a pre-seed round is 1.2 years of age now? And the median age of a company that raises a seed round is 2.7. This just ... I'm talking about data across kind of, you know, the last 10 years. Secondly, I would tell you is that a lot of times founders who are second and third-time founders don't wanna even be called to have a pre-seed round because it presupposes you need a seed round. And what does that mean to you, Harry? It means that if you have a pre-seed round and you have a seed round, that's another layer of dilution. So what you really would rather have for the best founders is they just wanna get a seed round. I mean, I wish we could just go back to that, but the cat's already out of the bag.