Good morning 👋
America is awesome - welcome back from the long weekend.
It used to feel like July and August were dead months in the venture world, but now it seems like there are still plenty of stories to cover.
Today, we’re breaking down some data from Peter Walker on how leads are taking down more and more of seed rounds and leaving less of the round for other investors.
Here’s why that’s bad for the venture game …
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The death of collaborative capital?
The general belief in venture has been the earlier you invest, the more collaborative the round becomes. Companies are inherently more risky, and seed investors have historically liked the idea of spreading some of this risk with other co-investors who can open doors and help these companies.
It looks likes that is changing.
Lead investors of seed rounds today are taking down 61% of the round (up 9% from four years ago), leaving less for other co-investors to divvy up.
A few reasons for this:
More multi-stage funds entering seed investing
Angels don’t have liquidity from seed investments over past decade
Smaller funds not deploying due to fundraising environment
We expect the trend to continue, and as it slowly does, it changes the hidden dynamics of the venture game.
Collaborative capital equates to positive-sum investing (everybody gets a piece of the upside). Fighting for ownership equates to zero-sum investing (ownership targets creates more losers).
What happens when one of these falls out of favor for the other?
ICYMI
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Signs of a pick-up in venture capital exits are finally emerging (FT)
Y Combinator alum launched a new $34M fund dedicated to YC startups, backed by Garry Tan (TechCrunch)
Veterans backing veterans: VC targets $50M for new fund as defense tech takes off (Pitchbook)
Here’s what the SEC has been up to in 2025 (Pitchbook)
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LINKS
💡 Key Ideas in My Conversation with Bill Gurley: Patrick OShaughnessy posts the key ideas from the various impacts of changes in the private markets, to where there may be opportunities
🧐 Venture Capital Indication of Interest (IOI) Template: Alexander Jarvis offers a free IOI template that can be used early in the fundraising process and allows prospective LPs to signal serious interest based on a summary of terms, providing valuable social proof without immediate commitment
🫶🏼 The Great Differentiation: Everything novel and valuable gets copied, at higher or lower fidelity so create something unique and true to you, something that only you have earned
🧩 0-$5M—How to Go from Random Wins to Repeatable Revenue: First Round partner Meka Asonye shares proven tactics from founders and revenue leaders who’ve solved the puzzle of closing different deals and building repeatability
🦄 Unicorns—Rare Miracles to more Common Milestones: The VC Corner charts the $1B unicorn club’s recent valuations
Thanks for reading this far and giving us a little bit of your attention this week.
Feel free to unsubscribe whenever this stops becoming valuable to you.
- Clay
(Founder @ Confluence.VC | GP @ Outlaw)
