Precursor is a solo-GP pre-seed firm that invests in people over product, writing the first institutional check ($250K-$500K) into mostly first- and second-time founders before there is meaningful traction. Charles Hudson weights the founder roughly 70/30 over the market and idea, and his core test is whether, with ~$500K-$1M and 12 months, the founder can tackle the number one problem facing the business. He fears advantages that aren't durable and prizes original thinking and taste over theme-chasing.
Evidence the founder is attacking the single most important problem facing the business, often a problem that today exists only as a hypothesis because the product doesn't exist yet.
“Oftentimes, the number one problem is the product simply doesn't exist. We're very much in hypothesis land.” — Everything you need to know about Pre-Seed (with Charles Hudson of Precursor Ventures)
“With $500,000 and a million dollars and 12 months of work, do I think this founder can tackle the number one problem facing their business?” — Charles Hudson
A solution whose advantage is durable rather than a feature gap a large incumbent could close; founders should not over-rely on 'incumbent can't do X' arguments they haven't proven themselves.
“The big thing for me is my fear is always that whatever the hypothesis the company has about why they're going to be successful it's just not durable.” — Everything you need to know about Pre-Seed (with Charles Hudson of Precursor Ventures)
“The number of times people tell me, 'Instagram can't do A, B and C thing.' I'm like, 'No offense. You haven't done it either.'” — Charles Hudson
“Products that require maintenance, new feature development, integrations, and the ability to interact with the customer's AI tooling and infrastructure will still be purchased.” — Charles Hudson
A market the investor doesn't hate and that can plausibly support a large outcome; founders should understand market structure and competitor advantages, not just headline TAM.
“I have revised that now to 70-30 in favor of the founders and the 30% means I have to not hate your market.” — Everything you need to know about Pre-Seed (with Charles Hudson of Precursor Ventures)
“They have a really good understanding of the market structure. Not just the market size, but who are the competitors and what are their competitors' relative advantages?” — Charles Hudson
“If I write them a check, do they have the potential to get to $100M ARR in seven years with reasonably good margins?” — Charles Hudson
Precursor explicitly does not require traction at pre-seed; where data exists, it should be a small set of metrics that show you're on the right track. There is no magic revenue number that unlocks the next round.
“There is no magic number, in terms of revenue or KPIs, that will unlock a Series A round by itself.” — There's No Such Thing as Series A Metrics
“Revenue should be an output, not a goal.” — Charles Hudson
“A startup company is more than just a bundle of KPIs and numbers.” — Charles Hudson
“there is usually a very small set of data and metrics that indicate you're on the right track” — Charles Hudson
Exceptional founders, often first- or second-time, with latent entrepreneurial upside and the intellectual honesty to admit what they don't know; the team is the overwhelming focus of diligence.
“Most of our diligence focuses on the people who founded and are currently managing the company.” — Due Diligence Checklist for Pre-Seed Companies
“We primarily invest in people who are first or second time founders.” — Charles Hudson
“People who are willing to admit that there are things about the business that they simply do not know.” — Charles Hudson
“The number one red flag for me is co-founder who talk over each other who generally barely contain their discord.” — Charles Hudson
A path to a large business with reasonably good margins; in an AI era Hudson is more cautious about software-like margins for thin utility products, favoring products with ongoing maintenance and integration value.
“If I write them a check, do they have the potential to get to $100M ARR in seven years with reasonably good margins?” — Charles Hudson is optimistic about outliers
“AI is having and will continue to have a deflationary impact on the software business.” — Charles Hudson
“Basic, utility applications with a narrow scope will face consistent downward pricing pressure from the threat that the end user will just build the product themselves.” — Charles Hudson
Founders who are respectful and genuinely informed about competitors and their relative advantages, and whose own edge is durable rather than a temporary gap.
“You have to be respectful and informed about your competitors and what they do well.” — To Get Funded, Have Vision And Understand Your Market
“They have a really good understanding of the market structure. Not just the market size, but who are the competitors and what are their competitors' relative advantages?” — Charles Hudson
“it's hard to compete if you aren't pushing the envelope and staying on the cutting edge” — Charles Hudson
A credible reason the moment is right — Hudson currently sees AI-driven change as a genuine inflection where traction gets funded, while urging that timing claims be grounded, not theme-chasing.
“Right now, rapid AI-driven traction is what gets VCs' attention.” — Reflections from Our 2025 AGM
“AI-driven white collar job destruction is happening much faster than predicted even last year.” — Charles Hudson
“Themes are just a terrible shortcut to original thinking and taste.” — Charles Hudson
A capital-efficient ask sized to tackle the #1 problem in ~12 months; Precursor leads first rounds with $250K-$500K checks and expects founders to map the next two-to-three steps of the journey.
“With $500,000 and a million dollars and 12 months of work, do I think this founder can tackle the number one problem facing their business?” — Everything you need to know about Pre-Seed (with Charles Hudson of Precursor Ventures)
“Have the next two to three steps in the journey mapped out.” — Charles Hudson
“The limited runway forces teams to only work on the things that matter most” — Charles Hudson
“I have revised that now to 70-30 in favor of the founders and the 30% means I have to not hate your market.”