Almost half of the VC funds raised in the last 6 months were Micro- VCs (those with < $50M AUM).

True or False?

Seed VCs provide more attention to portfolio companies and because there is no signaling risk when a dedicated Seed (aka Micro-VC) invests, companies have a higher rate of receiving follow-on funding.


We’d previously talked about the Series A Crunch’s next casualty being micro-VC funds.  While that will come to pass, Micro VCs are clearly en vogue for the time-being.

Over the past six months almost-half of the 129 funds closed were micro-VCs (AUM of < $50M) while 65% were $100M or less.

As Paul Kedrosky writes, there are “silly numbers of companies being seeded” and there now appears to be an increasingly silly number of micro-VCs.  Like VC returns in general, micro-VC returns will follow a power law - a handful of firms will generate the vast majority of returns.  

The silver lining in this is for entrepreneurs raising seed funding.  Between multi-stage funds doing seed deals and micro-VCs, there is a lot of competition for good deals at the early stage.

 VC Funds Amount Raised CLosed

We are seeing more and more LPs interested in assessing emerging fund managers with our Investor Mosaic models as they try to identify the next Sequoia, USV, or Greylock