4 ms·
This is a great post, but I think it fails to see one important point... > a founder selling at the Series D price of $210M, would make the same amount of mone
by santiagobasulto 3y ago
This is a great post, but I think it fails to see one important point...
> a founder selling at the Series D price of $210M, would make the same amount of money at exit as they would have if they’d sold for $38M after having only raised a seed round (...) Lifetimes of work and risk lie between a Seed round and a Series D round. And, despite increasing the value of the underlying business 7x, the dollars at exit for the founder remain roughly the same.
Even though the exit dollars might be the same, it's failing to see two important points:
a) founders taking money off the table in early rounds. Founders can sell part of their equity at their company just as a personal "cash out" strategy. 1password founders took their Series A mainly for this.
b) the network capital gained at a Series D company is NOWHERE near at a Series A company. It's impossible to put a dollar amount to that, but it'd say your career will be completely different from a successful Series A or Series D company.
- dublin 3y agoI'd take a solid cash cow producing producing value for customers at an A-round size over growing it to D-round size any day. Maybe because I've just been through enough of this crap to know that yes, you want to make money with your startup, but there are some things no amount of money can compensate you for... And a company spinning off a fair amount of cash can be grown surprisingly rapidly organically, though it does take several changes in how the company is run as it hits inflection points (there are usually several!) due to growth (e.g. people, processes, and effective business/marketing/sales oversight become more important to grow beyond $6-10M/yr...)
- mdorazio 3y agoIn the first scenario, how do you plan to return the A-round investor money at a multiple and timeframe they'll be happy with for their fund?
- mvkel 3y agoYep. The founder of Hopin took 180M in secondaries while raising 1B, and just sold it for $15M!
- moneywoes 3y agoWow I thought this was satire but wow Didn’t they buy streamlabs as well
- spaceman_2020 3y agoHopin raising $1B makes you wonder how smart VCs really are. It feels like a gigantic grift.