Signaling Risk? How Early Startups Can Work Best With Big Funds

3 min read

Signaling risk typically happens when a large fund comes into an early round, creating an expectation in the market that they will lead the next round. For instance, if a $1B firm puts in $1M into a seed, chances are they are looking to increase their ownership in the future. At Tau we strongly believe in the traditional approach of entrepreneurs raising from smaller guys early and from larger guys later. But there are definite pros to engaging early and there are some ways to mitigate the cons, which are the two threads this article will explore. 1) All Types…...

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Amit Garg I have been in Silicon Valley for 20 years -- at Samsung NEXT Ventures, running my own startup (as of May 2019 a series D that has raised $120M and valued at $450M), at Norwest Ventures, and doing product and analytics at Google. My academic training is BS in computer science and MS in biomedical informatics, both from Stanford, and MBA from Harvard. I speak natively 3 languages, live carbon-neutral, am a 70.3 Ironman finisher, and have built a hospital in rural India serving 100,000 people.