This sponsored post is brought to you by Venture51.

Seed and early-stage rounds are changing for the better. Today’s rounds are smaller in nature than they have been in the past, and that is good for founders and investors.

The size of a seed round typically ranges from $250,000 to $1 million and each one can have anywhere from two to three seed-type firms (or MicroVCs), and between three and ten angel investors. These rounds enable “strategics” to be brought into the early development of the company (which is crucial at this stage of the startup).

Cheaper start-up costs have allowed for smaller early-stage investments. In the 1990s, it might have taken $5 million to start a company. Today, that same company could be launched for $500,000 or less. This has created a new type of investment vehicle that allows smaller funds and angels to invest in and help grow businesses, potentially leading to a better opportunity for larger-scale VCs, or turning these startups into profitable businesses that don’t need follow-on capital. Either way, it’s a good thing.

There’s been a lot of discussion lately about the disruption when it comes to VCs. Perhaps there is some of that, but the real disruption is in more efficient company creation. The smaller initial bets in today’s startups, who now have extended runways because they are capital-efficient and can sustain low burn-rates, allow time for true customer development and rapid product iteration. The result is a better fit between the startup’s product and the market it’s trying to reach.

Ten years ago, most companies were products searching for markets. That’s just how they were built and investors fueled that way of thinking with large capital infusions. Was it the entrepreneur’s fault or the fault of the investors? It doesn’t really matter. What matters is that we learned a few lessons and this approach laid the foundation of pipes and infrastructure of the Internet as we know it today. Now there are a billion or more people on the web, making the Internet nearly ubiquitous.

Now that the physical foundation has been laid and the mental foundation of “lean” has been established, it’s a great time to start a company or invest in one. Overall, it’s still risky, as is any early-stage tech investment, but this change has alleviated some risk for seed investors and founders. Now we can focus on the most important aspect of making a seed investment: the people.

People are everything. The seed and early-stage game is about betting on teams and founders. We’re making character bets, knowing that the initial idea may change several times, but it’s the team that can make it happen, and create traction in different market opportunities.

Traction is important, but in the seed and early-stages, what serves as traction for one idea my not apply to the new idea (because of the fast iterations, loops, and product pivots in these stages). A great team that can iterate and demonstrate prior traction with past projects, or with their current project, becomes a very interesting proposition to investors.

At Venture51 we subscribe to the philosophy that, for the modern day startup, $500K is the new $5 million. The economics of our success are predicated on better batting averages, with more “singles and doubles,” and less emphasis on homeruns. It’s not that we’re allergic to the next big story, we just aren’t betting on it.

There’s been a tremendous shift in startups. The disruption lies in capital efficient, higher–velocity-driven founders solving big problems and making real money. Many debate the differences between big funds, micro-funds and angels. We don’t. We think we can all integrate nicely. We’re fine residing upstream, feeding the downstream ecosystem.

After all, if we’re all doing our jobs, and we’re all passionate about startups, it’s the founders who are changing the world no matter what stage they are in. Founders first!

This post was written by Brandon Zeuner and Ryan Swagar, Managing Partners of Venture51. Venture51 is a seed and early stage venture fund built for entrepreneurs by entrepreneurs. They partner with the best founders who are forming at the earliest stages of the emerging information technology market. Learn more at www.venture51.com, and contact info@venture51.com with any questions.