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Last week, Greylock made a move by announcing their latest Edge program.

It’s a huge move for the fund, and there will be secondary impacts across the venture world. Below I’ll cover the news, why it matters, and what I think happens next.

If you think I’m right, wrong, way wrong on any of the content this week, let me know in the comment section.

This Week in Venture
Greylock’s incubation bet 🌱

Last week, Greylock announced Edge, a three-month company-building program built to propel pre-idea, pre-seed, and seed-stage companies from concept to product-market-fit.

The program is personalized to each founder, the financing is flexible (more on that below), and the Greylock team promises to roll out all of its resources (network of experts for idea discovery, recruiting team to find first hires, AI researchers to implement business tweaks) to the companies that join.

Why it matters: We wrote a few weeks ago about the new trend of investors becoming more involved at the idea stage. This announcement only supports that trend, but the larger trend at play here is that the power dynamic might be slowly shifting back towards founders (at least in early-stage venture).

Greylock is offering a LOT to the founders of this program.

• Full access to their expert network

• Customer team and network to find design partners

• Full access to their recruiting team

• No ownership required

That last piece is the most telling.

Unlike other incubation programs, their team doesn’t have upfront terms you have to agree to in order to be accepted. They are fully flexible and allow companies to join either taking no capital, accepting an uncapped SAFE, or accepting a priced seed round.

Uncapped SAFEs. You read that correctly.

This goes to show you the lengths that one of the best funds in the world is willing to go in order to attract the best founders in the world.

What happens next: We think this raises the bar in terms of what founders should expect in exchange for a piece of equity in the early days of building.

Rewind a decade ago, and it was standard for companies to give up 20-25% of their business in exchange for a <$1 million “prove-it” check along with some mentorship from their early backers. As more and more accelerators, incubators, and pre-seed investors popped up, the stakes have been raised, and founders have more options to choose from.

This is why you see more and more funds competing on platform and brand in an effort to stand out from the masses. We think the trend of competing on those intangibles will continue, but this again raises the stakes given the financing component.

If platform and support becomes commoditized, who stands to benefit?

Short answer: Founders at the early stages and funds with the AUM to support the strategy.

Who stands to lose?

Short answer: Any traditional accelerator, incubator, or pre-seed fund that offers their value exchange under a standard agreement. With no flexibility in terms, what is stopping that founder from joining Edge instead?

Read more: Edge Overview, A $1 Billion Commitment to Day One

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Danish Munir (Founding Partner @ GreyMatter Capital)

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