21–30 of 36 posts
I have always wondered what is the common definition for a billion dollar company . Is it the annual gross or net revenues or is it the valuation ? If it is valuation, what P/E multiple ?
> 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…
A great company needs both growth and engagement.
" 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…
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…
Its not the math but the execution risk that is the issue.
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…
The problem is that no one can predict the future, so VCs end up backing people who promise billion-dollar potential. More realistic people who say, "yeah, this could do $50 million, maybe a little more", get hosed. But the either/or dichotomy ($50M lifestyle business vs. billion-dollar world-changer) is stupid. There's nothing that says that one can't get to the $50M point and then, once out of the gravity well, mak…
The fact that many of us believe that any given "billion dollar" prospect is counterfeit is neither here nor there. Sure, most VCs also fail with the "bet on billion dollar companies" strategy. Most VCs fail. But that doesn't mean that they should select instead a strategy that appears to be mathematically predetermined to fail.
Earlier quoted context omitted.
The problem is that no one can predict the future, so VCs end up backing people who promise billion-dollar potential. More realistic people who say, "yeah, this could do $50 million, maybe a little more", get hosed. But the either/or dichotomy ($50M lifestyle business vs. billion-dollar world-changer) is stupid. There's nothing that says that one can't get to the $50M point and then, once out of the gravity well, mak…
This comment isn't responsive either to 'patio11 or to the thread. The question is, "are VC's missing out on lots of successful exits because they're allergic to 50MM outcomes?". The answer seems to be "no", because the returns on 2 50MM exits in a 10 company portfolio don't make up for the goose eggs from the other 8. The fact that many of us believe that any given "billion dollar" prospect is counterfeit is neither…
There are too many hidden variables and no one knows what they are doing. I don't.
Earlier quoted context omitted.
Its not the math but the execution risk that is the issue.
No, it's the math, because you can't wish the execution risk away.
Earlier quoted context omitted.
This comment isn't responsive either to 'patio11 or to the thread. The question is, "are VC's missing out on lots of successful exits because they're allergic to 50MM outcomes?". The answer seems to be "no", because the returns on 2 50MM exits in a 10 company portfolio don't make up for the goose eggs from the other 8. The fact that many of us believe that any given "billion dollar" prospect is counterfeit is neither…
What makes you think that only 2 of the exits will succeed? Or that the projects slated for $50M won't turn out to be worth $500M when new approaches or uses for the work are discovered? There are too many hidden variables and no one knows what they are doing. I don't.