Do You Need a Billion Dollars to Do Seed?
Sameer Dholakia does not see how a small seed fund succeeds at the prices coming in for early-stage deals. Harry Stebbings asked whether a firm needs a billion dollars to do seed today, pointing at Bessemer's $1.75 billion seed and early fund and at a $900 million fund USV had just announced. Sameer Dholakia comes back to shots on goal. A fund needs enough swings to find a winner, and he does not know how a small seed fund gets there.
A seed check in his earlier years was $3 million to $5 million on a $20 million to $40 million valuation. He does not have the exact figures for today. He knows the checks are factors higher, and a firm has to hope it is a great picker. A lot of AI businesses are capital intensive. A fund can skip hardware, robotics, or training a model and look for work that needs less capital. He still thinks many companies in the intelligence era do need the capital, and the math will not work, for the founder or the fund, if the investor is not paying the price.
