Venture Trailblazers, October 1, 2026. Adeo Ressi in conversation with Charles Hudson, founder of Precursor Ventures.
On October 1, Adeo Ressi sat down with Charles Hudson for Venture Trailblazers, the VC Lab series where investors who built their firms their own way talk through how they actually did it. 1,046 people registered for the session, and we still finished the hour with more than 100 questions left in the Q&A.
Charles has raised five funds and about a quarter of a billion dollars at Precursor Ventures. He has never let a single fund get above $100 million, he runs the firm with no investment committee, and he writes the first check into 80 to 100 companies per fund, usually before there is a product to look at. Over the hour he and Adeo covered how he named the firm, how he sizes funds, how he decides, what he looks for in a founder when there is no data, what the Cursor round did to pre-seed pricing, and what 1999 taught him about this AI cycle.
Watch the full conversation here: Charles Hudson on Venture Trailblazers, the complete session.
This piece is about the answer he gave when a GP in the audience asked what actually predicts success at pre-seed. It is not what anyone wants to hear, and it is the most useful thing in the session.
The short version
- The strongest predictor Charles has found is how a company performs in the first six months after it gets money.
- Precursor formally rates every company at the six month mark, and that rating drives follow-on decisions more than anything else.
- The logic: almost every pre-seed pitch claims money is the binding constraint. Six months later you find out whether that was true.
- Reserves are small and concentrated on the top 20 companies, which means saying no to founders he likes.
The question, and the answer nobody wants
A GP in the audience asked Charles the question every pre-seed investor wants answered. When you invest before traction, what are the top two or three things you can actually underwrite that correlate with later success?
His honest answer was that the strongest signal he has found is one you cannot see at the time you have to decide.
"The most frustrating thing is the thing that seems to matter the most is the way the company performs in the first six months after they get money. This is unfortunately unknowable before."
Adeo pressed him for any other tell. Charles did not manufacture one, and that is worth noticing. He has written first checks into hundreds of companies across five funds, and his conclusion is that the pre-check signals are weak and the post-check signal is strong.
Precursor grades every company at six months
This is not a vibe. It is a process.
"I’m telling you, we rate every company after 6 months based on performance."
That rating is the biggest single driver of follow-on decisions. Sometimes it pulls the decision forward rather than back. "In some cases, it causes us to want to follow on in advance," Charles said, meaning they will put more money in before the next priced round because the company is visibly moving.
If you are running a fund, that is a mechanic you can copy this quarter. A scheduled, written, comparable rating at a fixed interval after the check, applied to every company the same way, so the follow-on conversation starts from a record rather than from whoever emailed you most recently.
The logic underneath it, and why it generalizes
Strip the specifics out of almost any pre-seed pitch and you are left with the same sentence: I have everything else figured out, and money is my principal constraint. If I had capital, I could go faster.
Charles treats that sentence as a hypothesis the check is designed to test.
"So if you add money and the company doesn’t almost immediately accelerate, money was not the principal constraint. There was some other thing. It could be their ability to hire and build a team, could be market timing, could be founder quality."
The test he applies is simple to state. In the two to three quarters after the first check, the company should feel demonstrably different. Not perfect, not profitable, different. New people, shipped product, customers who were not there before, a sharper story about who the buyer is.
What the test is really measuring is whether the founder knew what was blocking them. Plenty of smart people misdiagnose their own bottleneck. Capital exposes that quickly, because money only accelerates a company that was already pointed in a direction.
What this means for reserves
Precursor keeps a small follow-on reserve and concentrates it on roughly the top 20 companies as judged internally. Charles framed the posture as two modes that have to live side by side.
"You should always believe when you’re writing the first check that it’s going to work. But also be very realistic when it’s time to make follow-on decisions, because you have data and you know something."
Those two beliefs feel contradictory and are not. The first check is an act of conviction with no evidence. The follow-on is an allocation decision with evidence. Treating them as the same decision is how reserves get spread evenly across a portfolio and stop doing any work.
And then the part of the job he likes least, which he said out loud rather than dressing up:
"You have to be comfortable having awkward conversations with people where you’re like, I like you, but I’m not giving you more money."
How to run the six-month test in your own fund
- Write down the constraint at the time of the check. In one line, what does this founder say money unlocks? Put it in the memo.
- Set the review date when you wire. Six months out, calendared, not left to memory.
- Grade on the same axes for every company. Hiring, shipping, customer traction, clarity of the story, founder velocity. Comparable scores beat detailed prose.
- Ask the one question that matters. Did the thing they said money would unlock get unlocked? If not, what was the actual constraint?
- Let the grade drive reserves, in both directions. Pull follow-on forward for companies that accelerated. Stop funding the ones where capital was never the problem.
- Tell founders the clock exists. It is fairer, and it changes what they prioritize in month one instead of month five.
If you are a founder reading this
The implication is uncomfortable and useful. Your first six months after the check are the evaluation. Not the deck, not the intro call, not how responsive you were during the raise. The question your investor will answer about you is whether the money unlocked what you said it would unlock.
Which means the most valuable thing you can do in week one is be honest with yourself about what is actually blocking you. If it is not money, raising money will not fix it, and six months from now that will be visible to everyone.
Frequently asked questions
What does Charles Hudson say predicts pre-seed success? Performance in the first six months after funding, which he admits cannot be known before the investment is made.
How does Precursor make follow-on decisions? A formal six month performance rating of every company, with a small reserve concentrated on roughly the top 20.
Does Precursor ever follow on early? Yes. A strong six month rating can cause them to add money before the next round.
How long does pre-seed take to return capital? Charles and Adeo both put it at 12 to 13 years to liquidity, which is why Fund I performance tells you very little at the end of Fund I.
Watch the full session
Everything above comes from the hour Charles spent with Adeo on October 1. You can watch the complete conversation here, and the rest of the Venture Trailblazers series is on the VC Lab YouTube channel.
Want the whole session in one place? Charles Hudson’s advice for emerging fund managers is the full recap, with a timestamped index of every topic.
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