Speed is the New Seed: What Founders Need to Know To Attract A Top Seed Round Lead Now
The pace of top startup software adoption is accelerating at an unprecedented rate. The graph showing how quickly ChatGPT reached 100 million users in just two months is a testament to this. For a “reality check,” think about how Reed Hoffman, co-founder of LinkedIn, wrote a book about how to scale fast, Blitzscaling. See how that “blitzscale” reads in comparison now!
Source: Mary Meeker, Bond, July 2024
(FYI, this chart is part of an excellent recent report from Mary Meeker at Bond that you can access here).
For founders seeking a seed round today, this rapid scaling underscores the importance of unlocking speed in their growth strategy.
Prioritize Your Scaling Plan in Seed Round Pitches
Investors are looking for startups that can demonstrate a clear, actionable plan for rapid scaling. That has always been true—the companies on this chart WERE the record setters of their day. What most founders don’t realize, though, is how much the scale has shifted because of AI. In this new climate, founders should be prepared to showcase their scaling strategy, emphasizing how they intend to leverage AI to accelerate growth. AI’s potential to streamline operations, enhance user engagement, and optimize marketing efforts can be a game-changer—even if the product is not AI at its core.
The $100M Milestone Mindset
I recommend adopting a mindset focused on reaching 100 million users or $100 million in revenue. It’s not just ambitious, it’s the bar to attract and engage a great seed round lead. Even if you’re not pitching for capital, this framing helps founders think big and plan effectively for significant growth, making their startups more attractive to investors who are looking for scalable opportunities, like Valor. I get it—you won’t have product-market fit, and you won’t have this working at scale—but you can have a plan that’s working “in embryo” and iteratable—and that makes all the difference.
Actionable Takeaways for Founders Pitching for a Seed Lead Investor
•Integrate AI into Your Strategy Before You Pitch: Test, try, and enjoy embracing AI to augment your capabilities and streamline processes. Investors want to see how you’re leveraging the latest technology to drive growth and that you “know how to do it” even if you are underfunded at the moment. One of the great advantages of AI is that it’s way cheaper now to scale faster than it ever has been before. At Valor, we’re looking for founders who demonstrate that understanding and an applied-AI-layer pragmatism.
•Demonstrate Scalability: Show potential investors that your infrastructure and business model can handle rapid growth. How do people factor in? Or do they?
•Adopt a Big Picture Mindset: Frame your goals around significant milestones like 100 million users or $100 million in revenue. This ambitious mindset resonates well with venture capitalists. We love to break down the journey to the first $1M, and there are steps on the way, but bottom line, with the kind of scale possible today—and at speed—there aren’t necessarily long patterns between seed and significant revenue. Show us you get this through actual activity in your pipeline, not just plans.
Conclusion
In the current startup environment, focusing solely on product and product-market fit is no longer enough for a great seed round. The winners at the seed stage and beyond are those who can grow quickly and efficiently. By prioritizing speed and scalability, and leveraging AI in creative ways, founders can position their startups for truly transformative value. The fast growers will win the biggest, and now is the time to act. Here’s to your courage and your increased capacity to win big!
•Lisa Calhoun