Seed VCs decide on the team first. In a survey of 885 VCs at 681 firms (Gompers, Gornall, Kaplan and Strebulaev), 95% named the team an important factor and 47% named it the most important. Among firms that invest only at seed or early stage, 53% put the team first, against 39% at late-stage firms. Fit with the fund and the product come next. Valuation ranks last: 0% of early-stage firms call it the most important factor. Those firms considered about 119 companies for each investment they closed, so your first meeting has one job: show why this team wins this market, with the proof the fund's thesis asks for. Not investment advice.
What a seed VC is deciding
Paul Graham describes investors treating “big success” as binary because the few huge winners dwarf the rest. To look like one of those, he says you need three things: formidable founders, a promising market, and usually some evidence of success so far. He defines formidable as “roughly justifiably confident.” Most investors, in his telling, decide in the first few minutes whether you seem like a winner, and the rest of the meeting tests that impression.
The market test is a path. Graham asks for “a plausible path to owning a big piece of a big market,” and a specific trend behind it. Ask yourself why now: what changed that makes the idea work today and that others have not noticed.
YC’s seed guide (Geoff Ralston) puts it in one line: investors write checks when the idea is compelling, the team can realize it, and the opportunity is real and large enough.
What early-stage VCs weigh
| Factor | Important, early stage | Most important, early stage | Most important, late stage |
|---|---|---|---|
| Team | 96% | 53% | 39% |
| Product | 81% | 12% | 8% |
| Business model | 84% | 7% | 19% |
| Market | 74% | 7% | 11% |
| Fit with the fund | 48% | 13% | 13% |
| Valuation | 47% | 0% | 3% |
| Ability to add value | 44% | 2% | 2% |
Source: Gompers et al., Journal of Financial Economics 2020, Table 5. “Early stage” means firms that invest only in seed- or early-stage companies. The survey ran from November 2015 to March 2016.
The AngelList experiment backs the survey with behavior. Shai Bernstein, Arthur Korteweg, and Kevin Laws randomized what about 4,500 active early-stage investors saw across nearly 17,000 emails. The average investor responded to information about the founding team and did not respond to traction or to the names of current investors. The least experienced investors responded to all three. Lead with the team slide when the reader is a professional.
Fit with the fund is the second most common top factor at early stage: 13%, ahead of product at 12%. A strong company outside the thesis, stage, or check size gets a fast no.
The funnel your deck enters
| Funnel stage | Per closed deal, early stage | Per closed deal, all VCs |
|---|---|---|
| Considered | 119 | 101 |
| Met management | 34 | 28 |
| Reviewed with partners | 11 | 10 |
| Due diligence | 4.6 | 4.8 |
| Term sheet offered | 1.5 | 1.7 |
| Closed | 1 | 1 |
Source: Gompers et al., Table 4.
Early-stage deals also move faster. The same survey reports 73 days to close for early-stage firms against 106 for late-stage, 81 hours of diligence against 184, and 8 reference calls against 13 (Table 6). Expect references on you before a term sheet.
Two things follow. You need many conversations to land one lead, and the first meeting exists to earn the second. YC’s guide, on investor-day meetings: your goal “is not to close”; it is to get the next meeting. Leave each meeting with an attempted close or a clear next step.
There is no reliable public benchmark yet for seed-only conversion from first meeting to term sheet. The survey pools seed with early stage and is a decade old. Use it for shape, and track your own funnel.
How a seed fund prices the round
In the survey, 63% of early-stage VCs set valuation from investment size and target ownership, and 75% called desired ownership important. Their average target stake was 20% (Gompers et al., Table 10). YC’s guide lands in the same place from your side: most seed rounds dilute up to 20%, try not to go past 25%, and size the raise to reach the next fundable milestone, usually 12 to 18 months out.
The market for those checks is concentrating. Carta counted $3.19B across more than 11,500 U.S. pre-seed SAFEs and notes in Q2 2026, against $3.22B across 14,825 a year earlier. The average instrument rose 27% to about $276,000, and AI companies took 49% of pre-seed dollars in the first half of 2026. Carta reads this as concentration: the big early-stage bets go to fewer companies.
Match the proof to the fund’s lens
| Fund’s bet | What it needs to believe | What to show |
|---|---|---|
| Team bet (pre-product) | You will not quit and you know this problem | Why you, domain depth, how you answer hard questions |
| Defensibility bet | You can own something rivals cannot buy | The asset you control, such as proprietary data, and users who rely on you |
| Traction bet | Customers pay and stay | Revenue sized to your price point, renewals, buyers beyond your network |
| Category-leader bet | This can become the leading company in its market | The first market, the expansion path, why now |
Labeled composite: built from Graham (founders, market, evidence), YC (team, product, market), Gompers et al. (fit), and FounderNexus session judgment that one deck cannot serve every lens. The rows carry no thresholds. A traction bar depends on your price point and market, and no public source sets one for seed.
Operator judgment from those sessions: qualify the investor before you pitch. Ask about the thesis, the usual first check, and where the fund sits in its deployment period. A fund near the end of deployment may not be writing new checks however well the meeting goes. Reference-check the lead with founders from its portfolio. A difficult investor stays on your cap table for years. That is session judgment, not a survey.
Prepare the seed pitch
Seed pitch prep
- Build the fund list. Filter by thesis, stage, and check size. Fit is the most important factor for 13% of early-stage VCs (Gompers et al.).
- Convince yourself first. Graham: if you know why the startup is worth investing in, you will sound confident because you are telling the truth.
- Lead with the team. Why you, on this problem, now. The team is the factor both the survey and the experiment point to.
- Show the market path and why now. One first market, the hops to a big one, and the trend you ride (Graham).
- Bring the evidence the fund’s lens needs. Usage, paying customers, or the asset you own. YC calls 10% weekly growth for several weeks impressive.
- Tie the ask to a milestone. Months of runway, dollars, and what the money proves. Model it in the runway calculator.
- Run the first meeting for the second. Listen, connect, and leave with a next step (YC).
- Check the lead before you sign. Call portfolio founders, then read the term sheet red flags.
Mistakes that end a seed conversation
Bluffing. Graham: if you do not know an answer, explain how you would figure it out. Investors detect invented answers fast.
Grandiose market numbers. YC lists “ridiculous / silly market size numbers” among the things not to do. Show the path to the market instead.
Detailed financials at seed. YC tells founders not to build detailed financials, and to avoid an investor who asks for heavy diligence at seed.
Hiding the rejections. Graham: tell investors what scared earlier ones and why they were wrong. Experienced investors know the best ideas are also the scariest.
Pitching the wrong lens. A traction deck sent to a team-bet fund, or a vision deck sent to a traction fund, misses both.
Missing the no. YC: investors have many ways to say no. Session judgment: treat a friendly reply with no next step as a no, move on, and send an update when something material changes.
Pair with fundraising siblings
Close early checks on first angel check. Pick the paper on SAFE vs priced round. Read the lead’s terms on term sheet red flags. Plan the next raise on when to raise Series A. Orient the rest from the fundraising hub.
Sources
- Gompers, Gornall, Kaplan and Strebulaev, How do venture capitalists make decisions? (Journal of Financial Economics) — Vol. 135, no. 1, January 2020, pp. 169–190. Survey of 885 VCs at 681 firms, November 2015 to March 2016. Table 5: team important 95% / most important 47%; early stage 96% / 53%, late stage most important 39%; early-stage product, business model, market, fit, valuation, and value-add rows as shown. Table 4: per closed deal, early stage 119 considered, 34 met, 11 partner reviews, 4.6 diligence, 1.5 term sheets; all firms 101, 28, 10, 4.8, 1.7. Table 6: early vs late 73 vs 106 days to close, 81 vs 184 hours of diligence, 8 vs 13 references. Table 10: early-stage desired ownership important 75%; valuation set from investment and ownership 63%; target ownership 20%.
- Bernstein, Korteweg and Laws, Attracting Early-Stage Investors: Evidence from a Randomized Field Experiment (Journal of Finance) — Vol. 72, no. 2, April 2017, pp. 509–538. AngelList experiment with about 4,500 investors and nearly 17,000 emails; the average investor responds to founding-team information, not to traction or existing lead investors; the least experienced respond to all three.
- Paul Graham, How to Convince Investors — August 2013. Formidable founders, a promising market, and usually evidence; investors decide in the first few minutes; plausible path to a big market and why now; explain how you would find an answer; talk openly about rejections.
- Y Combinator, A Guide to Seed Fundraising — Geoff Ralston. When investors write checks; 10% weekly growth for several weeks is impressive; raise for the next milestone, usually 12 to 18 months; seed dilution up to 20%, avoid more than 25%; first meeting goal is the next meeting; no detailed financials; investors have many ways to say no.
- Carta, State of Pre-Seed: Q2 2026 — Hamza Shad, 13 August 2026. $3.19B across more than 11,500 instruments in Q2 2026 vs $3.22B across 14,825 in Q2 2025; average instrument about $276,000, up 27%; AI 49% of H1 2026 pre-seed dollars.
- FounderNexus session — Operator judgment: know which bet the fund makes, since one deck cannot serve every lens; qualify thesis, check size, and deployment period before pitching; reference-check the lead with portfolio founders. Not a survey.
Related
- Fundraising
- First angel check
- SAFE vs priced round
- Term sheet red flags
- When to raise Series A
- Series A diligence checklist
- Runway calculator with hiring plan
Founders who have raised seed rounds from institutional funds will pressure-test your fund list, team story, and evidence for each investor's thesis in a FounderNexus session.