If you are a pre-seed / seed investor, there is very little financial information to work with. Your investment thesis and decision is around high level observations such as market direction and founder capabilities to have a vision and execute.
If you are an investor from Series B and beyond, you are a later stage investor - businesses in your arena most likely have full financial models albeit probably very messy and difficult to work with because most CFOs are rather incompetent. This is less likely the later stage you go, because you're getting close to an exit transaction. Your check sizes ideally are $15 million and above, to make the amount of work you're doing worth it. Because honestly, you are probably doing the same amount of work or only a little less work for a Series B company versus a Series D.
If you are an investor in Series A, god bless you. Check sizes range from $2 to $10 or $15 million, and you work like a growth equity investor in terms of due diligence. This is difficult not only because of how much time you're putting in and financial work, but difficult because Series A is still fairly early, so the data you're receiving from the company is probably half if not quarter baked. But you're trying to do Series D style diligence on them, so you make a lot of assumptions. And you lose a lot of sleep. All for a single digit million check. Like come on.
So, for the best work to investment size trade off, it's best to sit quite late stage and accept your work life balance of being closer to PE especially in today's market environment, or really early where you are just vibe checking everyone and building networks.
Nonetheless, there is a lot of value in sitting in Series A to B, because it is probably the best place to develop your skills. You have an opportunity to grow your network and build intuition, as well as build more late stage diligence skills. However, it is pretty fucking hard. You will work very hard. You will get very good at modeling for later stage companies, and very good at making assumptions for early stage companies. You also will get rather good at bothering CFO's to reconcile their numbers, and then getting blank responses back. You will also build some intuition on what makes an early stage company good versus bad, what makes a founder good or bad. So, as a young person it is a good place to be. But once you decide where your strengths and interests lie, decide fast. So you can really focus your time on where you think it will be best used.
And get more sleep.
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