The Data Minute Your check size dictates fund strategy | Charles Hudson, Founder & Managing Partner, Precursor Ventures
8 snips
Aug 19, 2024 
Charles Hudson, Founder and Managing Partner at Precursor Ventures, discusses the evolving landscape of pre-seed investing. He delves into the distinct challenges faced by small funds in an AI-driven market and the necessity for new strategies that distinguish them from multi-stage firms. Hudson provides insights into SAFEs, the impact of policy on venture capital, and how shifting dynamics in Washington influence emerging managers. He also emphasizes the importance of transparency in fundraising and building strong relationships between founders and investors.
AI Snips
Chapters
Transcript
Episode notes
Check Size Limits Fund Growth
- Fund size limits strategy: smaller funds can write meaningful checks but can't scale indefinitely.
- Precursor limits itself to about $100-125M to maintain check sizes that add value to investments.
Multi-Stage Funds Dominate Seed
- Multi-stage funds raise large dedicated seed vehicles and write big checks to high-probability founders.
- This strategy effectively removes those founders from the broader seed market for smaller funds.
AI Investing Challenges for Small Funds
- AI investments are quickly flowing into capital-intensive areas like foundational models, tough for small funds.
- Consumer AI startups receive less investment despite hype, leaving a niche for small funds in dev tools and applications.