Charles Hudson started Precursor Ventures in 2015, and helped create pre-seed as a category.

Ten years and hundreds of Day 0 checks later, few investors have backed as many first-time founders, making him the perfect person to talk through the state of the category today.

We talk about why this is the hardest moment for pre-seed/seed investing he can remember, why sitting out of bubbles can be more dangerous than joining, how he hands his junior team real money to make their own bets, and urgency and “the last $250k effect”.

Thank you to Numeral, Flex, Amplitude, and Merge for supporting this episode.

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Timestamps:

(0:00) Is Pre-Seed dead?

(4:15) Do round names matter anymore?

(12:27) Multi-stage signaling risk doesn’t exist

(16:42) Smart LP’s love multi-stage funds

(22:03) Is the traditional Seed model broken?

(26:31) Velocity of capital deployment drives all incentives

(30:30) How to compete with megafunds at early stage

(34:24) Megafunds have Seed funds in a vice-grip

(38:34) “The best Series A’s are all expensive"

(39:33) Are we doing 2021 all over again?

(41:53) It’s safer to participate in bubbles than sit out

(47:35) Price you pay is everything

(50:22) The system incentivizes an addiction to consensus

(55:22) High valuation + high CapEx grows AUM

(59:56) How Precursor actually invests today

(1:01:32) Precursor’s Principal investor program

(1:05:56) Deciding when to selling your winners

(1:10:53) Raising as a pre-consensus founder

(1:12:39) What Charles looks for in founders

(1:17:20) What it’s actually like to start a fund

(1:20:56) Misconceptions of first-time fund managers

(1:26:22) 300+ LP meetings to raise Precursor Fund 1

(1:29:24) The single tweak to his pitch that raised the fund

(1:31:54) Precursor’s evolution over time

(1:34:57) The second desert of venture capital

(1:37:34) The last $250k effect

Referenced

Precursor: https://precursorvc.com/

a16z’s State of Markets report https://x.com/TurnerNovak/status/2015830796393742599?s=20

Follow Charles

Twitter: https://x.com/chudson

LinkedIn: https://www.linkedin.com/in/chudson

Charles Substack: https://chudson.substack.com/

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