Let's talk about party tours

When it comes to types of venture capital instruments, rounds are as controversial as it gets. A seed round is an early-stage funding round, which typically occurs between the pre-seed and Series A stages, that includes a laundry list – or “party” – of individual investors. This is different from a more traditional round, which may appear to be led by one or two institutional investors with a few participating investors also taking part.

The investment vehicle has been around for over a decade and has been debated for just as long. The positives are obvious: with more investors on their cap table, startups have more opportunities for distribution, presentations and advice throughout their lifecycle.

The downsides are more complicated. Is investment around the party as useful as capital from fewer and more sources of engagement? Are there too many cooks in the kitchen? Is this a negative signal that this startup had to send to dozens of people instead of a single strong-conviction partner? In a downturn, is a party all about confetti and allergen-free appetizers?

While the argument isn't new, today's market introduces dynamics that make parties a little more complex than just bringing a few of your favorite founders and thought leaders to your dinner table. capitalization.