Over the past few years, there has been a pronounced shift in the seed market. VCs now participate quite actively in the market. As a result, seed investment volumes have roughly doubled in the past year.

But is the seed strategy working for startups and VCs? Do hugely successful businesses raise seed capital? Do those businesses include VCs in their seed rounds? And most importantly, do the VCs follow on in the Series A?

To find the answer, I tabulated the early financing history for about 30 companies with $500M+ valuations (either private or public) founded in the past 8 years and sourced data from CapitalIQ and Crunchbase.

What fraction of startups with recent billion dollar valuations or thereabouts raised a seed round? About 55%.

What fraction of those seed rounds saw VC participation? 71%.

In what share of cases did VCs in the seed round lead the Series A? 67%.

To fully understand whether theses seed strategies work, we would need perfect information on total dollars invested in seed, the returns of those dollars, the cost of servicing the seed portfolio and opportunity cost of exploring investment elsewhere.

But on the whole, investing in seeds seems to pay off handsomely for VCs, particularly if the seed investing program lands a big winner. Additionally, the seed investment does lead to a high follow on rate, though to get a better sense we would need to compare this metric to the follow on rate of less successful startups.

Other interesting data points from the analysis: on average and of those billion dollar startups who raised a seed or A, the average seed round was $1M and the average Series A was $7.7M.