Having a lot of investors can be a good idea if:
- It’s Early — You’re still small;
- They Are Fine Investing On Basically Any Terms and Do Not Want Control (i.e. no one is going to negotiate or want control); and
- The Money You Raise Will Last Forever-ish.
Here, really, at least many of the true benefits of a Seed VC are lessened, and probably, you can get a better deal.
Let’s compare the benefits of 1–2 Seed VCs, especially Well Regarded & Respected ones:
- A Seed VC Can Write a Second Check. It’s very rare an individual angel will write a second check if you are doing OK but Not Great and need more money. Most Seed VCs, by contrast, explicitly reserve cash for this scenario.
- A Respected VC Can Deliver the Next Investor to You (If You Deliver Back). You still have to do the real work — deliver the growth, build the team, etc. But if your Seed Investor is respected by Series A investors — you’ll get the benefit of the doubt, and more importantly, almost auto-intros if you do well.
- A Seed VC Will Be More Invested & Care More. I don’t personally care >that< much if I’ve invested $25k as an angel. But if I’ve invested $3m at a fund level? That goes to the top of my list.
So those VC vs. “party round” benefits are real. But. If you don’t need those benefits, the value delta is less.