Intro.
#The Seed VC Funnel — 100 Deals In, 2 to 3 Investments, 1 Home Run
A seed VC reviews about 100 deals a year on average. Of those, 15 to 25% make it to a first meeting, and roughly 5% make it as far as a preliminary memo. Actual investments land at 2 to 3 deals. In other words, simply getting a first meeting means you have already cleared the top 25%.
| Stage | Pass Rate | Out of 100 Deals |
|---|
| Initial screening | 100% | 100 deals |
| First meeting | 15–25% | 15–25 deals |
| Follow-up meeting / light diligence | 5–7% | 5–7 deals |
| Investment committee | 3–4% | 3–4 deals |
| Actual investment | 2–3% | 2–3 deals |
TIP
95 rejections out of 100 reviews is normal. A rejection is not a signal that 'the company is broken' — it is closer to a sign that the fund-level return math did not clear the bar. Only when rejection reasons stay consistent across multiple VCs should you start questioning the pitch itself.
02
#The 80/20 Rule — 1 to 2 Home Runs Carry the Entire Fund
Seed funds do not follow a normal distribution. Of every 2 to 3 investments, 1 to 2 end up capturing 80% of the fund's total value — a power-law structure. The standard pattern for a seed VC is that 8 out of a 100-company portfolio account for 80% of the value. The other 92 stall near breakeven or go to zero.
| Return Multiple | Share of Portfolio | Role |
|---|
| 10x+ (home run) | 5–8% | Responsible for 80% of fund IRR |
| 2x–5x (solid return) | 15–20% | Returns principal plus some upside |
| Under 1x (loss) | 70–80% | Partial return of principal, or zero |
주의
Inside this structure, the real question a VC is asking is not 'is this a safe company' — it is 'can this company land in the 8% that returns 10x.' A steady plan projecting 5 to 10% growth is the fastest thing to get cut at seed.
03
#'This Market Looks Too Small' — What It Actually Means
This feedback is less a verdict on the market itself than a cut on whether this company can become a 10x candidate inside the fund's return model. Once market ceiling times achievable share sets a revenue ceiling, the Series A valuation and exit valuation implied by that ceiling come in under 10x the seed pre-money valuation, and that is the math running underneath the comment.
- Seed pre-money valuation of ₩3.0B → needs an exit value of ₩30B for the fund's stake to return 10x
- Assuming the fund holds a 5% stake → the company needs a total valuation of ₩600B
- Assuming a 5x PSR → the company needs ₩120B in revenue
- A ₩1T market at 12% share, or a ₩3T market at 4% share
- If neither looks achievable, the 'market is too small' signal kicks in
TIP
In other words, your answer to the market-size question cannot just be a big TAM number. It needs to be a simulation of the revenue ceiling you will hit 5 to 7 years out. The evidence behind your share assumption matters more than the market size itself.
04
#The 10x Return Simulation — Market x Share x Pre-Money Valuation
VCs run a quick calculation internally right after the first meeting. They multiply market size, achievable share, and seed pre-money valuation to estimate the fund's return multiple at exit. If that math does not clear 10x, further review gets blocked.
| Market Size | 5% Share | 10% Share | 20% Share |
|---|
| ₩300B | ₩15B revenue → exit at ₩75B | ₩30B revenue → exit at ₩150B | ₩60B revenue → exit at ₩300B |
| ₩1T | ₩50B → exit at ₩250B | ₩100B → exit at ₩500B | ₩200B → exit at ₩1T |
| ₩5T | ₩250B → exit at ₩1.25T | ₩500B → exit at ₩2.5T | ₩1T → exit at ₩5T |
체크
Assumes a 5x PSR. On a ₩3.0B to ₩5.0B seed pre-money valuation, 10x returns start kicking in once exit value clears roughly ₩300B. A ₩300B market with 5% share struggles to clear that line, and that is the essence of the first cut.
05
#Home-Run Case Studies — the Seed-Stage Math Behind Market Kurly, Karrot, and Toss
Companies classified as home runs at the seed stage share a pattern: either the market itself was explosive, the share assumption was overwhelming, or both. Market Kurly created an entirely new category, dawn delivery, and rewrote the share assumption itself. Karrot found a market with no ceiling: neighborhood-level local traffic.
- Category creators — the market looks small at pitch time but expands 10 to 50x within a few years (Market Kurly's dawn delivery)
- Massive-traffic plays — the market itself is worth tens of trillions of won, so even 1% share means hundreds of billions in revenue (Karrot, Toss)
- Global expansion plays — the domestic market is small, but the same business model works globally (B2B SaaS)
- Vertical integration plays — owning distribution, manufacturing, and sales within one category raises the margin ceiling
주의
To be classified as a home-run candidate, your pitch needs to explicitly show at least one of these four patterns. 'Steady 5 to 10% growth' reads as a rejection signal inside the seed VC model.
06
#Designing Your Market Answer — Not TAM/SAM/SOM, but '5-Year Revenue'
A big number like a ₩1T TAM is one of the fastest answers to get cut in a pitch. What a VC wants to hear is a revenue simulation for 5 to 7 years out, and the reasoning behind it. The evidence for your share assumption should be actual share data captured by the number one or two player in a comparable category, or a channel and customer lock-in structure you have already secured.
| Common Answer | Preferred Answer |
|---|
| TAM of ₩1T, SAM of ₩300B | Targeting ₩80B in revenue in 5 years, assuming 4% share |
| We're growing fast | Category CAGR of 38% over the last 12 months (comparable cases A and B) |
| We're different | The number one player in a comparable category holds X% share; we have a Y-point conversion-rate edge in the same channel |
| We're going global too | ₩60B in domestic revenue plus a realistic ₩20B from Japan (local pilot underway) |
TIP
VCs weigh the honesty of the assumptions behind a number more than the number itself. That is why an ₩80B target lands better than a ₩1T TAM answer.
07
#What Each Rejection Reason Really Means — Same Words, Different Read
The rejection phrases seed VCs use most often say less about your company and more about where the fund's return model is hitting a wall. The same sentence can mean different things depending on the stage.
| Rejection Phrase | What It Really Means | Next Step |
|---|
| The market looks too small | The 10x return simulation does not work out | Strengthen your share, adjacent-market, and global-expansion scenarios |
| It's a bit early | Metrics are thin, but there is real interest | Build an MVP and early revenue, then re-approach in 3 to 6 months |
| Once the team is stronger | Domain fit is lacking | Bring on a domain advisor or co-founder |
| It's not a fit for our fund's stage | Size or stage mismatch | Look at a different-stage VC or a SAFE round |
| We've already backed a similar company | Portfolio conflict | Go to a different VC — re-approaching is pointless |
주의
Of these five rejection phrases, 'the market is too small' and 'it's early' leave room to redesign your pitch and re-approach. But a portfolio conflict or a stage mismatch means there is no path forward with that specific VC.
Summary.
#Self-Check — Is Your Company a Home-Run Candidate?
- Can you draw a one-page simulation of a 10x exit value relative to your seed pre-money valuation?
- Is your market times share assumption backed by data from comparable cases?
- Does your 5 to 7 year revenue target come out to ₩80B or more?
- Instead of steady 5 to 10% growth, have you made explicit one of: category creation, massive traffic, or global expansion?
- Are you ready to interpret the real meaning behind a rejection phrase when you hear it?
- Have you pre-checked your list of target VCs for potential portfolio conflicts?
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