Fred Wilson offers some explanations as to why seed investing is less risky than late stage, this seems fairly straightforward and obvious, but it’s always nice to read Fred break down the VC game. Conventional wisdom would imply that as a company develops, some of the operational and financial risk is squeezed out, but indeed, I think that there are many other forms of risks that creep up, and Fred does a good job of listing some of the examples you would see on the front lines.
I’d paraphrase, or simply say instead: seed investing = less money at play, and thus, less risk. And since the returns are far, far higher, then it’s a no brainer to be in the early stage investing mindset, of course, some funds have billions to invest, and doing $250,000 to $2,000,000 rounds seems like trying to drain the world’s water with a cup.
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