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I think the post is off. How exactly is a VC—or any investor, really—supposed to make money from a startup that’s aiming for a “middle of the road” outcome? Th
by tlogan 2y ago
I think the post is off.
How exactly is a VC—or any investor, really—supposed to make money from a startup that’s aiming for a “middle of the road” outcome? That just doesn’t add up. In that case, wouldn’t it make more sense to invest in something safer or more traditional?
From what I understand, the very definition of a startup is tied to ambition. Founders need to be aiming for the moon—or at least something close to it. If you’re not taking big risks with the potential for big rewards, can you even call it a startup?
- pc86 2y agoPeople use "startup" to mean "start up business" and not "business that is aiming for rapid, borderline-unsustainable growth and very likely requires hundreds of thousands, millions, tens of millions of dollar to even start thinking about achieving it," which is what the actual definition is. VCs aim for 1 out of 50 investments to return 100x what they put into it, and the rest of them to die quickly and stop taking their attention. A company kicking off 5% returns every year is counterintuitively worse than flaming out immediately.
- tlogan 2y agoIn the tech and venture capital (VC) world, a startup is usually defined by its intent to grow fast and at scale. If you’re using the term “startup” in a tech/VC context: Yes, high growth is core to the definition.