I always wonder how much of the faibled 99% start-up failures are up to that attitude. Imagine to settle for 100 million exit, at maybe 2x, more often. Couldn't it be tgat VCs would ve more profitable? Serious question, bevause VCs are professionals in what they do and they definitely have a reason. A reason that totally eludes me.
I always thought Uber could be a nice billion plus business modernizing the taxi business and providing software to run it, but no, they had to grow so much to legally fight whole countries and upset regulations
I always have to adjust for this as an early-career engineer aspiring to start my own startup. It's insanely intimidating looking at companies with multi-million or billion-dollar valuations, but my definition of a "successful" company is probably vastly different than what most hyper-growth VCs are looking for.
I'm always more interested in the low-fixed-cost software businesses like Sublime Text, Pinboard, or Hwaci (SQLite)
the answer is no probably not. VC for tech startup exist because of economy of scale of tech and is ruled by power law. one winner that returns 100x is much more important than a handful that return 2x.
to be clear most VC funds are not actually able to do that.
They would have to adjust their strategy and be more selective in the companies they invest in. And they of course know that they aren't actually very good at picking winners, so that strategy is out.
reply