I mostly agree but I think the Revenue piece is often missing, or looked at in the wrong way. Too often at the angel level it’s about getting to series A and exiting there. For investors from Series A on, it’s about exit thru IPO or acq. Revenue is but one bit of traction used to justify the increase in price of the next round. To me, it should be the main thing but these companies are being traded like securities and schemes.
I’m totally with you. Particularly now, with the increase in interest rates, revenue is more important than ever in order to justify underwriting risk.
I should mention I have strong opinions here bc I bootstrapped my hardware co and used knowledge work to figure out our market. Takes longer but paid off, versus the co’s I advise now who “need” $1M seed to even get started 😂
Yeah I like this a lot. Was looking at doing a mini PE for small boring biz which rhymes w many of these ideas. I agree w need a focus on the middle but often a challenge is a missing middle on financing options as well.
I mostly agree but I think the Revenue piece is often missing, or looked at in the wrong way. Too often at the angel level it’s about getting to series A and exiting there. For investors from Series A on, it’s about exit thru IPO or acq. Revenue is but one bit of traction used to justify the increase in price of the next round. To me, it should be the main thing but these companies are being traded like securities and schemes.
I’m totally with you. Particularly now, with the increase in interest rates, revenue is more important than ever in order to justify underwriting risk.
I should mention I have strong opinions here bc I bootstrapped my hardware co and used knowledge work to figure out our market. Takes longer but paid off, versus the co’s I advise now who “need” $1M seed to even get started 😂
A great piece on this: https://neilthanedar.com/we-need-a-middle-class-for-startups/
Yeah I like this a lot. Was looking at doing a mini PE for small boring biz which rhymes w many of these ideas. I agree w need a focus on the middle but often a challenge is a missing middle on financing options as well.
Agreed. It’s a long, dry valley of death.