These are equivalent ways of looking at the same thing. On one hand you could say that money today is worth 5% more than money next year, and then figure the r

These are equivalent ways of looking at the same thing. On one hand you could say that money today is worth 5% more than money next year, and then figure the return net of the risk free rate. Alternately, you could say that VC money must provide returns in excess of the risk free rate and say that startups now are expected to provide higher returns. Both are mathematically equivalent. The broader point is that the current need to provide higher returns than before is more acute for a company that isn’t going to produce big profits for 10 years because of all of the compounding over that time.