The current state of 2022 pre/seed investing

https://twitter.com/shaig/status/1519501979445248005
  • Preseed is what used to be seed a few years ago because billions of new dollars came into the market and earlier rounds ballooned in size. Based on this chart, I play/invest in preseed as we’re very price sensitive and only invest <$10M valuations. When I started 6yrs ago, that was called seed. Why? Because that’s where we believe you make venture scale returns
https://twitter.com/Trace_Cohen/status/1512108273322930179
  • Seed rounds are now $3–5M on $15–$40M vals. They are either preseed rounds that got some initial traction so the $100M to $1B+ multi-stage funds will throw an exploratory check hoping to lead the next real round OR a very experienced team that kind of deserves it. Why take the additional risk of getting in a little earlier when you can pay up to see some data.
  • GPs are LPs in lots of new funds. This has been a growing trend I’ve been seeing in a lot of the funds my friends started and the three emerging funds I’ve invested in. It’s a genius tactic from the top GPs to basically buy data and the top deal flow from the level below them — they invest as LP, the fund is basically their scout, take their best investments, invest and mark up their own investments, rinse and repeat.
  • VC is still a hit business but now with more competition. A rare look at a top seed VC funds data.
https://twitter.com/chadbyers/status/1519806151801466880
  • They probably entered at $20–40M valuations hence the “smaller” multiple on a few of the unicorns
  • They probably did follow-on which further “reduces” the multiple because they invest more at a higher valuation. Put more money into your winners hopefully
  • I assume the big return is either Flexport recently valued at $8B or Robinhood (public but way down at $8B+ too) which was their first investment (wow!) “The first deal I did in the fund was Robinhood,” Byers says, a $250,000 investment in 2013.”

So what’s next? My predictions for the next year

A slowdown… just like we thought in 2020 when Covid started and we were all completely wrong a few months later.

https://twitter.com/PeterJ_Walker/status/1521150462892068864

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Trace Cohen

Trace Cohen

New York Venture Partners (NYVP.com) — pre-seed/seed in 40+ startups.