On a beautiful early autumn afternoon in 2021, Pitchbook published a very interesting article entitled “Seed Market Braces for Onslaught By Top VC Firms” — for those looking at the rapidly changing landscape of early stage and seed VC deals it is definitely worth a read.
First, it is undeniable that venture capital money is increasingly chasing transactions at earlier and earlier points — Sequoia, Andreesen Horowitz, Greylock and numerous others have raised large funds dedicated almost exclusively to pre-Series A rounds. The primary driver here (aside from increased competition for deals) is in essence a desire to lock up an option on a company such that, for those entrepreneurs that are able to succeed beyond the seed stage, the VC firm has an inside track for larger B and C rounds down the road.
While the allure of the big name VCs, especially for founders at the seed stage, is undeniable, this can create challenges for entrepreneurs both now and in the future. At the seed stage, the founders often find themselves unable to get the non-monetary support that young founders need — the large VC firms are placing small bets in a large number of companies, with the hope of expanding to larger positions in the small number of companies that move to the next stage of growth. Further, these founders can find themselves fighting an uphill battle in subsequent raises when the big players don’t come into subsequent rounds, rightly or wrongly sending negative signals to the rest of the market.
At QDS, we are exclusively dedicated to Seed and Series A round companies, and to support them, we have built a strong team of C-level executives with a broad range of subject matter expertise and a proven track record of founding, building and scaling tech startups in a variety of verticals. Our Operational Partners are the most important part of the support that our founders receive when the enter the QDS portfolio – beyond merely providing capital and sitting on Boards, QDS Operational Partners work hand in hand with founders to ensure they are built to scale and to smooth the handoff to the larger VC in their Series B and beyond. We have also built a network of strong relationships with the larger, later-stage VC firms to ensure that, while QDS continues to participate in subsequent rounds, its portfolio companies already have strong relationships with firms that will take them to the next phase of growth.
For those founders looking for investors that work hand-in-hand to surmount the myriad of challenges associated with growing from the seed stage and achieving exit velocity into future funding rounds, please contact us we’re here to help!