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This shows that idea is not really something that VC pays for. It is always the team behind the idea.

by siong1987 18y ago

dmix 18y ago
Or the hype behind the idea. With $5 million, the investors/founders believe it can be at least a $10 million dollar company in the next 5-7 years. I personally wouldn't have made that bet but at least they are charging money for their app.
- nickb 18y ago
  There's a VC out there that's happy with a 1x return in 5-7 years?! Your estimates are way, way too low. ;)
  - deleted 18y ago
    [deleted]
  - dmix 18y ago
    Oops, I meant to write $100 million.
- deleted 18y ago
  [deleted]
- gravitycop 18y ago
  With $5 million, the investors/founders believe it can be at least a $10 million dollar company in the next 5-7 years. The $5 million investment did not buy the entire company, so the valuation might be north of $10 million right now. Did you perhaps mean $10 billion?
  - arockwell 18y ago
    He probably just slipped a digit and meant $100 million. I figure that if you take VC money you believe you can build a company worth $100 million.
    - gravitycop 18y ago
      I figure that if you take VC money you believe you can build a company worth $100 million. Granted VC David Hornik in the following video is referring to revenue potential, I still think that what he says implies that VC's are looking for investments with potential exits far greater than $100 million. http://www.youtube.com/watch?v=epdTQf0ZhPE http://www.youtube.com/watch?v=epdTQf0ZhPE "Billion dollar companies? We like those, but we really prefer $100 billion companies." -David Hornik, August Capital
      - arockwell 18y ago
        To clarify I meant that as a lower bound. In other words, don't take VC money unless you believe you can create a company worth at _least_ $100 million.
fallentimes 18y ago
If this catches on in the enterprise they could make a killing. The sales cycle is killer, but the margins are usually ridiculous.
sgupta 18y ago
Completely agree that the team is very important in getting funded, but so are connections. Yammer is Founders Fund backed. 3 of the 4 partners from the Founders Fund are PayPal cofounders (Peter Thiel is the big name, but there's also Ken Howery and Luke Nosek) - Yammer's CEO David Sacks was the COO at PayPal before its acquisition.

This shows that idea is not really something that VC pays for. It is always the team behind the idea.

dmix 18y ago

Or the hype behind the idea. With $5 million, the investors/founders believe it can be at least a $10 million dollar company in the next 5-7 years. I personally wouldn't have made that bet but at least they are charging money for their app.

nickb 18y ago
There's a VC out there that's happy with a 1x return in 5-7 years?! Your estimates are way, way too low. ;)
- deleted 18y ago
  [deleted]
- dmix 18y ago
  Oops, I meant to write $100 million.
deleted 18y ago
[deleted]
gravitycop 18y ago
With $5 million, the investors/founders believe it can be at least a $10 million dollar company in the next 5-7 years. The $5 million investment did not buy the entire company, so the valuation might be north of $10 million right now. Did you perhaps mean $10 billion?
- arockwell 18y ago
  He probably just slipped a digit and meant $100 million. I figure that if you take VC money you believe you can build a company worth $100 million.
  - gravitycop 18y ago
    I figure that if you take VC money you believe you can build a company worth $100 million. Granted VC David Hornik in the following video is referring to revenue potential, I still think that what he says implies that VC's are looking for investments with potential exits far greater than $100 million. http://www.youtube.com/watch?v=epdTQf0ZhPE http://www.youtube.com/watch?v=epdTQf0ZhPE "Billion dollar companies? We like those, but we really prefer $100 billion companies." -David Hornik, August Capital
    - arockwell 18y ago
      To clarify I meant that as a lower bound. In other words, don't take VC money unless you believe you can create a company worth at _least_ $100 million.

fallentimes 18y ago

If this catches on in the enterprise they could make a killing. The sales cycle is killer, but the margins are usually ridiculous.

sgupta 18y ago

Completely agree that the team is very important in getting funded, but so are connections. Yammer is Founders Fund backed. 3 of the 4 partners from the Founders Fund are PayPal cofounders (Peter Thiel is the big name, but there's also Ken Howery and Luke Nosek) - Yammer's CEO David Sacks was the COO at PayPal before its acquisition.