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Why are there no successful VC's that follow your and Matt's "founders can reliably predict the future" strategy? Because you're assuming that I'm saying that
by pmjordan 18y ago
Why are there no successful VC's that follow your and Matt's "founders can reliably predict the future" strategy?
Because you're assuming that I'm saying that all 3x valuation situations are the same. Obviously the founders (especially first-timers) will usually be much keener to exit at 3x than risk crashing and burning, because there's more on the line for them personally than for the VCs. And it's understandable that VCs (need to) protect against that, as it probably happens a lot.
However, the author (an investor himself) deemed this case sufficiently noteworthy to write about it. The impression I got wasn't that this was as clear cut a case as the usual "hold out until 10x valuation". But I suppose it comes down to the fact that we know very little about this specific case.
- gravitycop 18y agoHowever, the author (an investor himself) deemed this case sufficiently noteworthy to write about it. No he didn't. He explicitly said that there was nothing noteworthy about the case. My friend couldn’t understand why his board was blocking the sale. He asked me why the VCs on his board couldn’t see the situation they were in and appreciate the opportunity for a great exit that was right in front of them. I explained that it wasn’t the VCs who were missing something; it was my founder friend who didn’t get it. This is not an isolated event. It happens all the time.