The “Bang Bang” Round, Inspired By Louis C.K.

With just under three years of seed-stage investing experience under my belt, I’ve stumbled upon a behavior I haven’t seen yet. Homebrew’s Satya Patel captured the phenomena in a tweet a few days ago, above. I have seen this first-hand. It can happen from either (1) pre-seed close to a seed round; or (2) from a seed round close to a pre-emptive Series A, all within weeks if not days while the previous round’s ink is still drying.

In Scenario #1, the pre-seed round is done at a price which should really be reserved for the seed round, and this can often put the founder/company in an awkward auction position within seed. Amazingly, even some standard VCs will dip their toes into the water and test things out here. In Scenario #2, mid-sized funds start to see deal heat forming as a seed round closes and hear about a team or traction, they can jump in, slap down a real check, and jack up the valuation to satisfy their ownership requirements.

Yet again, a great time to be a founder…a founder that’s raising money early. The whole phenomena immediately reminded me of a Louis C.K. episode, where he and his brother skip going to the gym in order to go have two lunches in succession — he calls it the “Bang Bang,” (note, this is his language, not mine) where you eat at one place, and then immediately go somewhere else to eat another meal. In SF and the Valley in 2015, there hors d’oeuvres are being passed around, and a lot of people are happily stuffing their faces. Here’s the short clip from Louis below:

Haystack is written by Semil Shah, and is published under a Creative Commons BY-NC-SA license. Copyright © 2017 Semil Shah.

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