Great post @david! I really resonate w 1 and 3 here. So often startups could likely, sometimes easily, get to profitability and then still provide a substantial ROI for early investors but are forced by many "unicorn" or "ring the Nasdaq bell" hunter VCs to show the path to unicorn to get the investment. I think the best scenario, as you might imagine, is to be in a place where the company CAN get to profitability and hence sustainability, but in the right environment could have a huge PE payout or even "ring the bell". Re #3, VCs and Angels should be on the lookout for companies who have a core customer base that is tied to what we learned in the pandemic to be "essential businesses". B2B companies that support infrastructure etc vs. B2C companies with discretionary funds being used are far more stable in uncertain times. That B2C, discretionary spending is what can drop like a rock or at best rubber band back and forth. My guess is that #2 you mention gets tied to where everyone agrees the markets and multiples will likely be when the company gets to scale and is ready for a potential exit. Assuming that is 3-4yrs out ones opinion on the economy rebounding becomes the basis for discussion I would assume. Thanks for great post
Great post @david! I really resonate w 1 and 3 here. So often startups could likely, sometimes easily, get to profitability and then still provide a substantial ROI for early investors but are forced by many "unicorn" or "ring the Nasdaq bell" hunter VCs to show the path to unicorn to get the investment. I think the best scenario, as you might imagine, is to be in a place where the company CAN get to profitability and hence sustainability, but in the right environment could have a huge PE payout or even "ring the bell". Re #3, VCs and Angels should be on the lookout for companies who have a core customer base that is tied to what we learned in the pandemic to be "essential businesses". B2B companies that support infrastructure etc vs. B2C companies with discretionary funds being used are far more stable in uncertain times. That B2C, discretionary spending is what can drop like a rock or at best rubber band back and forth. My guess is that #2 you mention gets tied to where everyone agrees the markets and multiples will likely be when the company gets to scale and is ready for a potential exit. Assuming that is 3-4yrs out ones opinion on the economy rebounding becomes the basis for discussion I would assume. Thanks for great post