Lessons from Investing in 400 Startups with Charles Hudson of Precursor Ventures

Charles Hudson is the Managing Partner and Founder of Precursor Ventures. Precursor is a generalist pre-seed firm based in San Francisco that invests in startups from all over. We talked about the importance of founder-centric investing, portfolio construction, and the balancing act of taking money off the table with winners. Charles has made over 400 investments at Precursor and has a wealth of insights to draw upon as a result. 

The episode is now available on Apple Podcasts, Spotify, Amazon, and YouTube Music.

Chapters from Lessons from Investing in 400 Startups with Charles Hudson of Precursor Ventures

00:00 The Journey to Fund Five

02:39 Scaling the Firm: Systems and Team Dynamics

05:50 The Challenges of Fundraising: A Personal Perspective

08:33 Navigating Liquidity in Pre-Seed Investments

11:27 The Opportunity Fund: A New Approach

14:26 Market Dynamics and Founder-Centric Investing

17:24 The Evolution of Venture Capital Strategies

20:31 Lessons from Successful Founders

23:09 Leveraging Technology in Venture Capital

26:34 The Importance of Previous Startup Experience

29:12 Rethinking Market Size and Founder Potential

32:18 Debunking Myths in Venture Capital

35:01 Connecting with Precursor: A Call to Founders

Takeaways from Lessons from Investing in 400 Startups with Charles Hudson of Precursor Ventures

• Raising across cycles = different games. Fund II was the most stressful (“prove you can sustain it” with little data), while Fund V was the hardest thanks to post-SVB LP liquidity anxiety about long-dated, illiquid pre-seed funds.

• Liquidity playbook (pre-seed edition). Default heuristic: sell ~10–20% starting at the Series B (5–7 years in), ideally to the new lead (0–10% discount). Marketplace/other buyers often mean 20–40% discounts—only worth it with huge price appreciation or LP pressure. Balance DPI vs. TVPI, and beware selling too much of winners too soon.

• The barbell is real. Venture is maturing toward a few scaled platforms (can take $100–$400M LP tickets with lower risk/return targets) and artisan boutiques; the middle gets squeezed.

• Solo GP… with systems. Precursor scaled by pairing a single GP with a 14-person org and strong ops: finance, IR, and a core team handling diligence and founder workflows.

• Tech leverage > heroics. Airtable (+MCP) is the portfolio OS; a “digital twin” of Charles in Delphi (≈1.1M words of content) gives founders 24/7, Charles-style guidance before meetings.

• Pattern recognition on founders. Prior startup experience is a strong predictor at pre-seed because zero-to-one demands knowing what to do and how fast; about half of top performers are domain insiders and half are outsiders; look for early, real risk-taking in a founder’s history.

• People > market (but not 100/0). Today’s weighting: ~80/20 people/market. Charles just needs to “not hate” the market—because smart people with too little capital can’t pivot out of a truly bad idea in time.

• LP preferences aren’t monolithic. Some LPs want breadth built via their multi-manager portfolios and thus don’t value a single, very-broad manager; others remain philosophically skeptical of diversified pre-seed portfolios.

• Opportunity fund reality check. SPVs worked; a pooled opportunity fund fit fewer LPs (they either wanted to cherry-pick or already had A/B exposure). Precursor did one opportunity fund, deployed it, then shifted more follow-on off the main fund/SPVs.

• Operator tool in the wild (Boardy). Backed repeat founder Andrew D’Souza early; product evolved from a fractional-experts network to a network-extending AI tool Charles uses weekly—a case study in “get people + domain right, product will follow.”

The content here is for informational purposes only and should not be construed as investment, legal or tax advice. The opinions expressed by guests are their own and do not reflect the views of Seaplane Ventures. Our host, guests and clients may hold investments discussed in this podcast. Please invest responsibly.