Greylock this week announced a $500 million fund dedicated to seed rounds, raising eyebrows as well as questions on Twitter about whether traditional seed VCs will be left out in the cold.

Between the lines: The seed market is bifurcating, but the barbell isn't necessarily a threat to smaller investors.

• “What is still crushingly relevant is why an entrepreneur will select an investor to be on their cap table," says Sapphire Ventures' Beezer Clarkson. "And that is becoming more competitive every day.”

Big money: Greylock's news comes on the heels of Andreessen Horowitz announcing a $400 million seed fund last month.

• “The size of the vehicles matters, and then based on the size, the expectations for the winners goes up exponentially,” Haystack founder Semil Shah explains.
• Outsized return expectations mean larger seed funds will mostly focus on hotter and more obvious deals, where having a larger checkbook is an effective way to win. It’s the Tiger Global strategy, but at the seed stage (and likely anticipating that Tiger and its peers will be doing seeds soon).
• "If you're trying to hunt for contrarian, non-obvious founders, nothing has changed," Hustle Fund co-founder Eric Bahn says.

Yes, but: There’s the potential for a negative signal if a large VC firm that led a startup’s seed round later declines to back its Series A round. Plus, there is the ever-present valuation creep.

• Some VCs also warn that these new big funds won't mean more capital for entrepreneurs who are historically overlooked. They'll still face the same challenges in getting funded, unfortunately.

The bottom line: Venture capital doesn't evolve as fast as tech, but it does evolve.

Not only are regular VC firms raising seed funds, but seed firms are raising later-stage funds to double down on their breakout stars.

• Examples include Felicis, BoxGroup, Version One, Homebrew, Susa Ventures, Upfront Ventures, and Uncork.

Between the lines: “If you have the access point — you have 10% in Brex or 10% in Hopin, why would you let anyone else take it?” Shah asks.

• This is partially a function of exploding valuations and ensuing dilution to early investors. Typical seed funds aren’t big enough or set up for follow-on investing beyond a certain deal size or price.
• Some seed firms still limit their expansion. Homebrew, for example, raised what it calls an “overage fund” a while back to take advantage of pro rata allocations into Series B rounds of Fund 1 and 2 portfolio companies.
• Per Homebrew’s Hunter Walk: “We've resisted the idea of raising a significant opportunity/growth fund historically just because we don't necessarily want to be managing Series D+ checks. There's money to be made, especially in a bull market, but I think it's a distraction to our core focus.”
• And some seed firms like Root Ventures choose to stick with special purpose vehicles, especially if they've refined their processes to make them fast and efficient enough to keep up with today's lightning-quick rounds.

The bottom line: "That’s bound to happen when access to deals is the currency of the industry," says Union Grove Venture Partners managing partner Patrick Cairns. "Can’t fault them for wanting to monetize their networks, relationships, and deal flow."

• The growth in seed round size is undeniable, with rounds of $1-5 million increasingly dominating and larger rounds taking up a heftier share every year, per Pitchbook.

• Assessing the world of opportunity funds (Venture Unlocked)
• Is early-stage VC becoming a growth investor's game? (CrunchBase News)
• The end of VC as we know it (The Information)

The startup world loves novel marketing names for new trends (or new twists on existing trends).

• Question: What's the common term for very large seed rounds? (Answer at the bottom.)