11–20 of 36 posts
It doesn't make sense to invest in anyone who might just grow to a 50 million dollar company? I think VCs must be missing out on a lot of opportunities.
" You’ll never be a billion dollar business if you’re not deliberately working to get there. And in venture capital, it doesn’t make sense to invest in anyone who isn’t at least trying to build a business that size." It doesn't make sense to invest in anyone who might just grow to a 50 million dollar company? I think VCs must be missing out on a lot of opportunities.
" You’ll never be a billion dollar business if you’re not deliberately working to get there. And in venture capital, it doesn’t make sense to invest in anyone who isn’t at least trying to build a business that size." It doesn't make sense to invest in anyone who might just grow to a 50 million dollar company? I think VCs must be missing out on a lot of opportunities.
I think the parlance for tripled-our-money is "base hit." You don't play baseball to hit base hits. (Well, unless you're the Oakland As -- and talk to Dave McClure et al if you want to hear this metaphor in a lot more detail.)
There exist angels and other seed-stage investors who would not be unhappy with a $50 million exit, to put it mildly. (To say nothing of the founders and the employees.)
Intercom's story has been a wonderful one to watch. They're a particular inspiration for those of us in Ireland; they've consistently aimed high, have set high standards for themselves, and generally raised the bar for Irish companies. Their blogging has been interesting since before Intercom was even incorporated (at their consultancy company, Contrast's[1], blog). They're also a bunch of smart, down to earth people…
> FOCUS ON ENGAGEMENT QUALITY BEFORE ENGAGEMENT QUANTITY I'm glad they touched on this. I've heard from several sources that many VCs don't care about engagement at all , as long as growth is massive - which seems crazy to me. For my own SaaS, I'm focusing entirely on engagement and getting the service right before scaling up. I'm constantly talking to early users, gathering feedback and iterating. It's a slow and pa…
" You’ll never be a billion dollar business if you’re not deliberately working to get there. And in venture capital, it doesn’t make sense to invest in anyone who isn’t at least trying to build a business that size." It doesn't make sense to invest in anyone who might just grow to a 50 million dollar company? I think VCs must be missing out on a lot of opportunities.
It's very difficult to make the math work out for Series A/B/C if you exit at $50 million. If a VC firm invests $5 million and gets a 3rd of the company, then you sell for $50 million, they get ~$15 million on that deal. Yay. Unfortunately, to get there, they had to spend $30 million on 10 similarly situated company, in excess of half of which have a liquidation value of zero. Absence of yay. I think the parlance for…
This year the Oakland A's were 3rd in the MLB in home runs (out of 30 teams), last year they were 7th. In the famous moneyball season (2002) they were 4th. They very much build their teams around hitting home runs, just like most VCs :)
I realize you are mentioning the analogy second hand, but I just want to make sure people don't get confused about the A's! There certainly are some smallball [1] teams in the MLB, but the Oakland A's are not one of them.
Earlier quoted context omitted.
It's very difficult to make the math work out for Series A/B/C if you exit at $50 million. If a VC firm invests $5 million and gets a 3rd of the company, then you sell for $50 million, they get ~$15 million on that deal. Yay. Unfortunately, to get there, they had to spend $30 million on 10 similarly situated company, in excess of half of which have a liquidation value of zero. Absence of yay. I think the parlance for…
Minor baseball analogy nit: This year the Oakland A's were 3rd in the MLB in home runs (out of 30 teams), last year they were 7th. In the famous moneyball season (2002) they were 4th. They very much build their teams around hitting home runs, just like most VCs :) I realize you are mentioning the analogy second hand, but I just want to make sure people don't get confused about the A's! There certainly are some smallb…
" You’ll never be a billion dollar business if you’re not deliberately working to get there. And in venture capital, it doesn’t make sense to invest in anyone who isn’t at least trying to build a business that size." It doesn't make sense to invest in anyone who might just grow to a 50 million dollar company? I think VCs must be missing out on a lot of opportunities.
It's very difficult to make the math work out for Series A/B/C if you exit at $50 million. If a VC firm invests $5 million and gets a 3rd of the company, then you sell for $50 million, they get ~$15 million on that deal. Yay. Unfortunately, to get there, they had to spend $30 million on 10 similarly situated company, in excess of half of which have a liquidation value of zero. Absence of yay. I think the parlance for…
All these numbers are bullshit when starting out, anyway.
There exist angels and other seed-stage investors who would not be unhappy with a $50 million exit, to put it mildly. (To say nothing of the founders and the employees.)
Actually, $50m exits under current conditions are horrible for employees, just because employee equity is so low. After preferences, it ends up being equivalent to the kind of bonus bankers get when the firm's trying to get rid of them.
Aside from just regular greed, I think one of the reasons VCs push for pathetic option pools is to create a company where a $100 million exit will piss off almost every single employee, which means that even if the founders would prefer it, there are plenty of key players who'll only do their best in a quest for a $10B+ result.