The Seedmuda Triangle: How to Evaluate Founder Judgment Beyond Traction Curves

April 4, 2025
This is a personal audit.

I failed to generate revenue for the first four years.

Eventually, my lead seed investors recommended I shut it down and return the remaining capital.

I understand why they made that call. From their vantage point, based on what they could see, it was rational.

But what I could see looked different: SwayID wasn’t dying. It was forming.

This essay offers a personal framework for assessing founder judgment when traction is nonlinear and clarity takes time to crystallize.

This isn’t a takedown. It’s a learning tool for VCs and founders like me.

The Problem

Seed stage companies are often judged prematurely.

Especially now, in an AI-accelerated world that rewards speed over depth, early stage traction can be misread as a substitute for long term clarity.

The consequence? Great companies are written off too early.

And it’s not theoretical. I lived it.

The Framework: The Seedmuda Triangle

The Seedmuda Triangle evaluates a founder's post-investment judgment across three sequential decisions:

1. Solve the Right Problem

2. Build the Right Product

3. Design the Right Company

If a founder gets pulled out of sequence say, scaling before they’ve nailed the right problem, they often fail.

Yet many VCs don’t track the sequence or quality of these calls. They track surface-level traction, looking for a hockey stick.

The result: performative growth, misaligned expectations, and early shutdowns.

My Case Study: SwayID

Solve the Right Problem

• ❌ 2020–2023: "Democratizing influencer marketing"

• ✅ Aug 2023: Legal fragility in UGC & influencer content

Outcome: Took 3 years to land on the real, high leverage problem.

Investor Response: Lead investors recommended shutdown in Oct 2023, weeks after the correct pivot.

Better Posture: Stay engaged. The founder had just cracked the problem.

Build the Right Product

• ❌ Q3 2023–Jan 2024: Multiple rapid pivots (UGC upload site, influencer membership club, creator discounts)

• ✅ Aug 2024: SwayID—compliance infrastructure for creator marketing

Outcome: 10 months of fast testing post-problem clarity.

Investor Response: Reduced experimentation to lack of direction. Forfeited shares.

Better Posture: Recognize the founder was testing rapidly to find product-problem fit.

Design the Right Company

• ✅ 2025: Decision to HQ in D.C. after rigorous weighted decision matrix (credibility, capital efficiency, regulatory surface area, etc.)

Outcome: 1 month to lock in operations model.

The Core Idea: Judgment Compounds

When founders are given room to iterate in sequence, clarity builds.

• Problem clarity is slowest but most critical.

• Product clarity comes faster once problem is locked.

• Operational clarity becomes obvious with the first two in place.

Yet many investors confuse traction with readiness. That confuses the whole system.

We need frameworks that reward compounding clarity over fast theatrics.

Let’s rethink the feedback loops we’re creating.

Closing Note

I don’t claim this framework is perfect. It just helps me keep going.

Because this work isn’t just my job. It’s my first love.

Kaeya