Bootstrapped founders enjoy an automatic 3x-30x exit multiple compared to their VC-funded peers! "A smaller piece of a bigger pie" is the common refrain convincing founders to take VC money. But how much bigger does the pie really have to be? The answer is astounding. Up to 30x! And that's ignoring typical VC terms like liquidation preferences, participating preferred, and investor anti-dilution. These can result in founders getting literally ZERO even if the pie were infinitely bigger! How is this even possible? The math is simple. Here is a slide from my presentation at the Charlottesville Entrepreneurs and Espresso event yesterday explaining this shocking but little known gotcha for founders. #bootstrapping #startups #vc #entrepreneurship
Super interesting and helpful to see the math breakdown. Thank you Steven Yates.
Really interesting -- thanks for giving us this perspective!
Preach 🤘🏼
Growth Debt for Software Companies | Co-Founder & Managing Director
3wYes! We need to decouple romanticism with VC and raising equity. There's only one good day: the day you get a tech crunch article. From then on you have a boss that's going to push you to grow 10-100x because that's the only way they make money. How about keeping more ownership and control and achiving a meaningful exit instead!