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In my example, the company was in no way planning this to be the outcome. They were shooting for a big acquisition or even IPO by capturing a sizable % of a $40
by itslennysfault 3y ago
In my example, the company was in no way planning this to be the outcome. They were shooting for a big acquisition or even IPO by capturing a sizable % of a $400b market. At some point it became clear this was not going to happen, but a path to profitability became clear so they followed it. From a fiduciary responsibility perspective this is a perfectly fine choice to make, but it is the last thing the VCs want as it results in zero ROI for them.
- tptacek 3y agoRight. Everybody who works in startups has the experience of shooting for the moon and getting as far as, like, Tulsa. No harm in that! Tulsa's a big city. It's only a problem if Tulsa is where your sights were set before you pull the trigger, which is the feels I get from people talking about this as a company formation strategy. No VC is going to wire you funds on a pitch that's about making high 7s, low 8s tops if it ever succeeds at all.