The case for seed funds
In today’s venture landscape, the riskiest and most vital moment in a startup’s life is often the first one: the leap from idea to action. It’s the phase where everything is still in motion: the team, the vision, the first users.
It’s where the right kind of investor matters most.
Lately, some of the supermarket firms are investing in seed rounds.
This strategy makes sense for these large, supermarket-like firms. By backing many seed-stage companies, they spread bets across sectors and secure early stakes in promising startups. If a few succeed, these firms are well-positioned to lead later rounds.
But is this good for founders? Often, no.
Supermarket firms frequently back competing startups. Their incentive is optionality. They don’t want to miss out on the next big winner in a space. When updating your investors on company progress, you might find yourself sitting across from someone who’s also backing your direct rival, and wondering whose breakout story they’ll double down on.
They make so many bets that taking their money can lead to empty promises.
You deserve better. You deserve a seed specialist.
What makes an exceptional seed fund?
Seed is often the stage where founders need support to make their first experienced hires, garner feedback from early users, and navigate the inevitable pivots that refine the core of their products. It demands focus, domain expertise, and the kind of support that can only come from being deeply embedded in the grind with the team.
Specialist seed funds are built for this. Their entire business depends on the success of the earliest stage. They don’t hedge; they commit.
We believe that the best seed funds differentiate themselves through:
- Domain expertise: They have a seasoned background in the sectors they are supporting. Whether that’s as researchers, operators, or experienced investors.
- Sector focus: Many seed funds are broad. We value managers who clearly focus on the sectors they can best support. We look for funds that share our enterprise product mission across several categories, geographies, and emerging spaces.
- Strong and experienced teams: We look for managers who have solid relationships with one another and bring complementary skills to the table.
How we partner with seed fund managers
A seed round is not just a smaller Series A.
Seed investing is a unique craft that requires deep conviction, agility, and steady guidance.
The best seed investors offer a specialized discipline and work closely with builders to help shape what a company becomes.
At N47, we’re building a long-term ecosystem by cultivating close relationships with exceptional, focused seed fund managers who share our values and investment philosophy.
We support these partners through:
- Founder-focused programming: We invite seed fund managers and founders into our GTM network (events, resources, and connections specifically tailored for seed-stage companies). This programming helps their seed-stage companies scale into where our broader GTM team can accelerate growth.
- Strategic support: Having reviewed thousands of venture decks over nearly two decades, we often help seed managers sharpen their fundraising strategy and positioning. For first-time seed managers, this can mean direct feedback on pitch materials, guidance on how to structure a new fund, and insight into approaching LPs.
- Community building: We often connect promising seed managers with prospective LPs who seek to build relationships with and invest in seed funds. We also host community-focused events, such as dinners with seed fund GPs. We believe in building networks that amplify the work of committed seed investors.
- Backing seed funds as a limited partner: In select cases when there’s strong and direct alignment, we commit as a limited partner to a seed fund and collaborate closely.
Our role is to strengthen the entire seed ecosystem, because we know that getting seed right shapes everything that follows.
Conclusion
The temptation of getting a supermarket on your cap table early and hoping they stay in the boat is rapidly shifting. Today, the best founders increasingly optimize for stage fit and value alignment.
At the seed stage, that means choosing investors who treat your success as their core business, not as a hedged bet. It means surrounding yourself with people who know how to spot greatness at inception, not just in the rearview of metrics and growth curves.
The new generation of iconic companies will be built by founders who are deliberate about every layer of their journey, who choose partners that go deep, not wide, and who believe, as we do, that greatness starts at the product, not the pitch.
If you’re building something generational and want to own more of it at exit, start with a great seed specialist. We can help you connect with the best.
Build something extraordinary.
