The problem with taking seed money from big VCs

This seems so obvious and yet something I hadn't thought about until I read the article.

We took seed money from one of the largest VC firms in the valley. We didnt know they even did seed rounds, and this is not publicized. Additionally, they invest as an angel syndicate, and don't use their official VC name. All of this because they understand the problem entrepreneurs face with taking seed money from big VCs. The fact that they've thought this through from the entrepreneurs point was a huge plus factor for us.

So that's the downside: the Big VC will make a Series A harder if they are the first to reject you when shopping for that Series A.

Solution: don't approach the seed VC for a follow-on, skip it or postpone it until last resort, in which case the new alternatives can used as 'Stalking Horses' on the seed VC anyway if playing hardball.

Big VC seed money is a good endorsement and help for a company, and the upside is the chance of an easy follow-on from them because they have the pockets: but wait for them to come calling first, or have some Stalking Horses ready if you sense being played. Otherwise just skip them altogether on a Series A.

This argument doesn't play... All investments have similar if not equal concerns: is your current investor going to re-invest? Might potential rivals instead collude in their offer?

On the other hand, if this strategy is widely known. People won't look any more if they invest again or not.