The new math: Why seed investors are selling their winners earlier

Charles Hudson had just closed his fifth fund several months ago — $66 million for Precursor Ventures — when one of his limited partners asked him to run an exercise. What would have happened, the LP wondered, if Hudson had sold all his portfolio companies at Series A? What about Series B? Or Series C? The question wasn’t academic. After two decades in venture capital, Hudson has been watching the math of seed investing change, maybe permanently. LPs who’ve previously been patient with seven-to-eight-year hold periods are suddenly asking questions about interim liquidity. “Seven or eight years feels like a really long time” to LPs right now, says Hudson, even though “it’s always been seven or eight years.”