Is $1M too little?

So I'm loving Brad's new blog AskTheVC. It's great.

Someone recently asked "how do you raise a small amount of money". in this case the person asking the question was talking about seeking a $1M investment.

I disagree that a $1M investment is too small for a $200M+ fund . I think it's really about the definition of "too small" and the style of the firm.

We are managing a $260M fund. We have done a few deals putting in as little as $2M. We look at <$1M investments all the time.  And we would absolutely do a $250k seed investment for the right team and right idea.

If you are looking for less than $250k than it might be harder and angels would probably be best.

Again, I think it's about the firm itself and their style. Size matters but it's not everything :-)

Comments

[Jeff]

Does this mean I can send you some info on MobaTalk then??????

[Grand Egress]

I applaud your thinking here. Fred and Brad at Union Square agree with you too.

But it does beg the question -- how many Boards/investments can one VC fund partner manage? In $1MM increments, dont you inevitably get stretched way thin?

[Darren Herman]

I agree 100%. Different venture capital firms have different restrictions and requirements. There is no doubt that $1m is low on the totem poll, but you could invest the $1m early, then follow it up with another funding round 6 months to 12 months later (for a full A-round).

[Eran Baniel]

Very few Web 2 startups arround us need more than 1 Million USD to bring their exciting products to market and give themselves a fair trial. This is great: taking smaller risks and keeping a promising upside in sight.