Imagine a $100m VC fund. They invest $1m into your startup for a 20% ownership stake. You use that money wisely, hit profitability and decide you don’t need t

Imagine a $100m VC fund. They invest $1m into your startup for a 20% ownership stake. You use that money wisely, hit profitability and decide you don’t need to raise more money. 10 years later, you sell your business for $30m. You still own 80% of the company and walk away with $24m. For you, the founder, this is a life-changing triumph. Now, here's the VC’s ledger: - Company Sale Price: $30m - VC Ownership: 20% - Cash returned to VC: $6m - VC Goal: $300m (assume 3x+ target return on $100m) - Progress toward goal: 2% Even though you built a healthy business, your success only moved the needle by 2% for the VC. From their perspective, the time and space you took in their portfolio was “wasted” because you didn’t have the potential to return the fund. This is why VCs push founders to go “big or bust.” They would rather you take a 90% risk of going bankrupt trying to become a $1bn “unicorn” than settle for a 90% chance of becoming a $30m business. In the VC model, a $30m exit and a $0 exit look almost exactly the same. This is why the "raise once and done" or "seedstrapping" approach doesn't work for VCs. But, that doesn't mean it won't work for other types of investors. Or, does it?