Cartoon: Free solo
Free solo by Ian Foley
This new cartoon illustrates the difference in expectations between a start-up entrepreneur and a venture capitalist.
A $100 million exit for a company that has only raised a seed round is life changing for founders. But in 2022, where limited partners expect a return threshold of 6.5x gross, this type of return is not meaningful.
As a result, venture funds are increasingly taking larger bets on a smaller number of start-ups, hoping that they will deliver outsized returns.
For the entrepreneur, there is a lot of opportunity for glory in achieving multi-$100 million or $1 billion exits, but there is also an even higher chance of failure.
For the venture capitalist, they can make multiple start-up bets hoping at least one or two can achieve home runs so that they can raise the next venture fund.
#venturecapital, #startuplife, #startupexit
You can find more of Ian’s cartoons here.