Fund Structure
Micro-VC
A venture fund typically under $100M focused on early-stage seed and pre-seed investments — often run by a solo GP or small team.
Micro-VCs emerged as the seed stage professionalized in the 2010s. Firms like First Round Capital, True Ventures, and Forerunner Ventures helped establish the category, though the term typically refers to even smaller funds — often $10M-$50M — that specialize in very early stage deals.
Micro-VCs can often move faster than larger funds, write smaller checks, and take more risk on unproven founders. The tradeoff is less capital for follow-on investments and less operational support infrastructure.
In Practice
A $30M micro-VC might invest $500K-$1M into 25-30 companies at the pre-seed or seed stage, betting that 2-3 will become breakout companies. To generate strong returns, they need at least one company to reach unicorn scale since they likely won't own enough of any winner to return the fund on modest exits.
Why It Matters
Micro-VCs have become the dominant source of institutional seed capital but face a fundamental power law challenge: they need outsized winners to return their fund, yet their small ownership stakes mean they need companies to be truly massive to matter.