Lightspeed Venture Partners is solidifying its initiatives for scaling up, mirroring similar strategic moves by other investment entities.
The hurdle for Series A funding is a lot higher than it was a year ago — and investors in seed-stage companies are having to respond.
They don’t have much choice if they want their startups to survive. When the market abruptly turned in the spring of 2022, late-stage companies were the first to feel the pain. But that downward financial pressure has more recently made its way to much newer outfits, which are getting lower valuations in their next round — 1.6x in the second quarter, the lowest value since the third quarter of 2013, per PitchBook data — and facing choosier Series A investors with plenty of options.
Venture capitalists are showcasing their creativity in various ways on this front. European venture firm Breega, for instance, highlights its “scaling squad” dedicated to bolstering its numerous seed investments. Meanwhile, Pear VC, a seed-stage venture firm based in the Bay Area, consistently introduces fresh programs designed to assist and educate the emerging teams it supports.
Even the bigger, stage-agnostic firms are doing more to telegraph that they’re responding to the current market. In October, for example, the investment firm Greylock rolled out Edge, a three-month company-building program “designed to advance select pre-idea, pre-seed and seed founders from inception to product-market fit.”
VC heavyweight Lightspeed Venture Partners is also stepping up its game. The firm has long written early (and sometimes, first) checks to nascent startups, including the messaging app Snapchat; the application performance management outfit AppDynamics (acquired by Cisco just ahead of its IPO); and the publicly traded cloud computing company Nutanix (current market cap: $11.2 billion).
Led by partner Luke Beseda, the purported idea isn’t to attract more founders to Lightspeed but rather to clear the path for the startups it has already funded so they can get to that Series A round. Nearly all of them face the same questions and obstacles, explains Beseda. “They need to know: How do I set up and run a business? How do I hire and build a core team? How do I build my product strategy through customer interviews and design partnerships and drive revenue?”
Going forward, Lightspeed hopes to more systematically answer these questions through expert-led workshops, seed “playbooks” and other toolkits that Lightspeed is offering through its new program.