No Leading, No Guts, No Glory

I spoke to a new seed fund investor the other day and they told me they don't lead.

I told them that was bullshit and they should, because founders need decisive investors who can be helpful, not ones that sit on the sidelines and outsource their decisions to other investors.

They told me their fund wasn't big enough.


I led the $1.8mm seed investment in goTenna with $250k.  I led the $4mm Ample Hills round with $300k.

There's no official definition of a lead other than someone who puts down a term sheet, helps gather the round, and who is most active with the company.  You don't have to be more than half the round.

When you're small, like my fund, I call it the flypaper termsheet.  You've got all these indecisive people buzzing around the company, and you put down some terms that are fair and everyone can agree to.  I love when the flypaper termsheet can help an entrepreneur tip the scales and get a round done.

To me, a fund that doesn't lead is saying to the market, "We don't really know how to make decisions, but we'll let someone smarter than us make the call."  

Do you really want that person invested in your company?

Or, worse, they're saying, "We think this is good, but we don't really want to do any work unless we know this round will close--so we don't want to risk wasting our time and we're not going to help you close it."


Or, even worse, it means, "We aren't honest enough to just say we don't like this.  So we'll feign interest, knowing no one in their right mind would ever lead this, so it looks like we were supportive, but we were just setting you up to fail."

If you can't put your stake in the ground, make an independent decision on a company, say what the price should be and the terms, or you just don't have the time, what are you even doing running a fund? 

I don't even know why someone would invest in a fund where the General Partners don't have enough conviction to hand someone a termsheet.  How in the world did you get LPs??

Saying to someone raising a seed round "Come back with a lead, " is lame.  It's a seed round, not a $40mm Series C.  

*That is the job.*

If you're in NYC and you haven't raised $750k yet in a previous round, Brooklyn Bridge Ventures leads.