Definitely. But if the VCs have to hold and they expect that outcome then they'll never invest 5 years before, which means they'll never get to that point. So founders today need to understand that when VCs see a 2x over 5 years -- that's why they're not investing today.
Very thoughtful writing. Great article! I too love that Mike Tyson quote hehe.
Great post.
However, I would be a buyer of that IPO in the $2b scenario.
Why?
The math (EV of $2,093m, $419m ARR = 5.0x at 50% growth) shows an EV/Rev/Growth of 0.10x.
Sector median EV/R/G is 0.27x today (per Meritech comps table). So a 63% discount. Good risk reward for the IPO buyers.
Definitely. But if the VCs have to hold and they expect that outcome then they'll never invest 5 years before, which means they'll never get to that point. So founders today need to understand that when VCs see a 2x over 5 years -- that's why they're not investing today.
Got it. 2x/15% IRR on your *winners* means you don't raise another fund.
ownership targets matter again!