Venture capital has shifted toward larger, later-stage deals over the past two decades, even as startup formation has accelerated. In that environment, firms that focus on the earliest stages of company building occupy a smaller share of the market. First Round Capital is one of the firms that has maintained a consistent focus on seed investing despite those changes.
Founded by Josh Kopelman and Howard Morgan, First Round Capital has invested in more than 500 startups since its inception. The firm targets seed and early-stage technology companies across the United States, with a model built around entering companies before they establish product-market fit or generate revenue.
A Model Built Around Early Entry
First Round Capital’s initial funds were structured to support small, early investments with reserved capital for follow-on rounds. One early fund targeted $7 million, with roughly half allocated to initial checks and the remainder held for subsequent financing.
Historically, a limited percentage of venture firms have invested in pre-revenue companies, in part due to the higher risk and longer exit timelines. As more capital moved toward later-stage rounds, early-stage founders often faced fewer institutional options.
By concentrating on seed-stage opportunities, First Round positioned itself to invest before competitive funding processes emerge. That approach also reduced exposure to pricing pressure that can occur in later rounds when multiple firms compete for allocation.
At the same time, seed investing presents structural challenges. Early-stage funds often rely on consistent deal flow, broad networks, and the ability to identify founders before traction is established. Over time, First Round expanded its sourcing network and team, addressing limitations that have historically constrained smaller seed-focused funds.
Early Investments That Scaled
The firm is frequently associated with early investments in companies that later reached public markets or large private valuations. Among the most cited examples are Uber, Roblox, and Square, which were all included in the firm’s second fund.
First Round was the first institutional investor in Uber, leading its seed round in 2010 when the company was operating as UberCab. According to reporting from The Wall Street Journal, the firm invested approximately $1.6 million across Uber’s first two funding rounds. That position was valued at about $2.5 billion at the time of Uber’s 2019 initial public offering.
The same fund also included an early investment in Roblox. First Round invested in the company in 2009 and held about 6.8% at the time of its 2021 direct listing. The outcomes of those investments are often cited in discussions of early-stage venture returns, where a small number of companies can account for a significant portion of fund performance.
Beyond those examples, the firm’s portfolio includes companies such as Notion, Looker, Verkada, as well as newer startups, including Clay, Together AI, Fal.ai, and K2 Space.
Expanding the Role of Seed Investors
In recent years, venture firms have taken a more active role in supporting portfolio companies, particularly at the earliest stages. First Round Capital has developed internal programs aimed at addressing gaps that founders encounter before scaling.
In 2024, the firm introduced the PMF Method, a structured program designed to help founders reach product-market fit through defined testing, iteration, and feedback processes. The initiative reflects a broader shift in venture capital, where firms provide operational support alongside funding.
This evolution has coincided with changes in startup timelines. Companies are often expected to move from concept to measurable traction within shorter periods, increasing the importance of early-stage guidance. Seed investors, in turn, have expanded their involvement in areas such as hiring, product development, and go-to-market planning.
Market Dynamics and Positioning
Data over time has shown that seed and startup funding have declined as a percentage of total venture capital allocation, even as the number of new companies has increased. That imbalance has contributed to continued demand for firms willing to invest before revenue.
At the same time, the risks associated with seed investing remain pronounced. Outcomes depend on deal selection, access to founders, and the ability to support companies through early uncertainty. Not all portfolio companies progress to later rounds, and fund performance is often driven by a limited number of outliers.
First Round Capital’s long-term focus on early-stage investing places it within a segment of the venture market that prioritizes access at company formation. Its track record, including early positions in companies that later reached public markets, has contributed to its recognition within the industry, even as capital continues to concentrate in later-stage deals.
