Less than 20% of Seed-focused funds lead rounds

When it comes to raising a Seed Round, often the hardest investor to get onboard is the lead. Without a lead investor, founders raising their Seed Round will often hear the following from investors, “I’m interested, but I don’t think I could lead, once you have a lead, circle-back.” 

As a founder, it can be exciting to hear so many investors are interested in your startup, but at the end of the day, how interest converts to actual investment is an entirely different story. In many cases, until you have a lead, getting a clear intent and amount from other investors can be tough.

It’s the reality that most founders learn the hard way. Most investors are happy to follow, but far less are ready to lead. Last week NextView Ventures wrote an article on Forbes sharing research that they did on the Seed Stage investing market, they looked at data from over 600 Seed-focused firms and ran the numbers on how many lead rounds. In the end, even a fund specifically focused on Seed Rounds lead less than 20% of the time. 

NextView also put together a pretty interesting chart that they also shared in the Forbes article, it shows the geographic location of active Seed VCs.


For the analysis, we considered a fund an “Active Lead Investor” if they were designated as the Lead Investor in the seed round for at least 2 companies since the beginning of 2017.

Despite this low bar for a lead investor, we found that out of over 600 seed funds on the list, only 102 fit the criteria as a lead. This is obviously a much smaller minority of the seed VC universe, but still is a substantial number of investors.

(Source – Forbes)

No surprises here, the Bay Area sees the most activity when it comes to Seed Stage Funds leading rounds, and let’s be honest, that’s because the sheer number of firms in the Bay Area is the largest. Next up is New York and then LA and Boston, and then a big category that other ancillary markets like Seattle, Portland, Austin, Miami, etc. get lumped into.

Of course, this chart doesn’t mean that if you want to have a Seed-focused firm lead your round you need to be located in the Bay Area…but there’s a better chance the firm you find will be. 

So what does this mean for founders of a Seed Stage startup?

I think there are three key lessons to be learned here, or at least datapoints that I think are interesting to digest.

  1. You’ll really need to do your homework if/when you’re looking for a lead investor. Talking to a Seed-focused VC firm that rarely leads might not be your best pick if you’re looking for a lead yourself. 
  2. If you’re not in the Bay Area or New York, plan on flying there to meet with investors, the firms who could lead your round are there.
  3. When you’re meeting with a Seed-focused fund, don’t be afraid to ask them if they lead (i.e. don’t just assume that they do) and ask them if they could see themselves leading your round.

Thanks to NextView for doing the deep dive here, this is great data to have and also a much lower % of Seed-focused funds leading than I would think. Before I saw this I thought that a majority of Seed-focused funds lead rounds, but the reality is, over 80% of Seed-focused funds don’t.

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