De-risking Pre-Seed & Seed Startups

I recently saw this chart on startup risks by venture capital stage. I bring this topic up with founders often to give them an idea of what follow-on investors think about.

For us, market risk is baked in from the very beginning. We make an assessment of market or demand risks as part of our diligence prior to investing. Most founders we chat with and eventually invest in know the product they want to build or the market they want to serve.

One thing I would like to share is more color on how early-stage investors can help with derisking some of a pre-seed/seed startup’s operations.

The founders and the team are ultimately responsible for the execution, but any lift from investors can go a long way.

I also wrote about how later-stage investors underwrite for TAM expansion, which may come in the form of customer persona expansion. Article here.