Good News: Big Companies Can Grow From Tiny Amounts Of Funding


For the past few years – and it’s especially true this year – there has been tremendous growth in the number of seed stage investments and the number of angels (people investing their own money) and VCs (people investing their own money *and* other people’s money)

We have been making seed investments since the earliest days at Spark. We take these seed investments very seriously, and we go through the same decision making whether it’s a $250k investment or a $2MM investment.

An easy way to describe the decision process is we ask if we believe the founders, their vision and ability to execute have the opportunity to create something ultimately quite big

Even if it starts out quite small (as they mostly do). Sometimes it works and sometimes it doesn’t.

If we believe the company is best served by a quick flip or small exit then we encourage the founders to raise money from investors that are comfortable with that strategy or help them feel out if bootstrapping is a better model.

I do not believe that raising a small amount of capital initially means that you can’t build a huge company. I disagree with people that tell me that there is no way you can build a big company from a mere $250k. You can actually do it with less.

In my mind the opportunity has little to do with the size of the first round of capital.

Bijan Sabet is a partner at Spark Capital. This post was originally published on his blog, and was republished with permission.

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