Meet The Moment

A few weeks ago I wrote a post about “Unstated” VC fundraising risks, or things VCs are often thinking but not saying. Another one in this category might be called “Meet the Moment” Risk. Essentially, this boils down to, “do we think this founder has the leadership instincts to scale up this business in a big way - revenue, people, products, markets - when their moment finally arrives”?

Most if not all seed investments are essentially pre-product market fit (PMF). So timing risk is often embedded in seed investing - will this market “arrive” quickly enough? But whether the market is happening right now (robotics, context for AI agents, foundation models for robotics or bio, datacenter networking in the age of AI workloads), or may arrive in the hopefully near future (e.g. quantum datacenters), in both cases the question arises as to whether this founder can “ride the wave” when their moment to shine comes.

So much of the pre-PMF journey is iterating your way to PMF. But once you’re there - and PMF is a continuous journey, not static - the company won’t achieve a venture-scale outcome without a strong leader at the helm who can appreciate and manage through hypergrowth, which is a very different skill set than the search for PMF.

There’s an inherent conundrum here: do extraordinary founders build big companies, or do huge markets “force” founders to grow into leaders?

Todd and Freddy at Okta, and Melanie and Cliff at Canva, founded their companies, eventually found PMF after grinding, and then successfully scaled up to building public or public-scale companies. Another view is that founders are “Navy Seals”, who are at their best when they are determining which hill to take next (new markets/products) while leading a big organization can often be done just as well by seasoned non-founder leaders.

There are no automatic answers - younger, first-time founders vs. repeat founders, founder-led vs. operator-led. There is some correlation - though not perfect - with founders who have “lived” hypergrowth before and seen it firsthand (but: technical domain experts building in the research or lab setting may be just as ready for scale, particularly if they have the right mentors and advisors around them).

In either case, founders raising seed capital need to be able to credibly tell the narrative that they - and the people they recruit - will be able to “meet the moment” when their market and product finally hits.