Founder friendly and investor friendly do not have to be at odds with one another.
Truth is founder friendly is the path investor friendly.
One of the craziest things I observed in my first you as a VC is how afraid founders are to tell VCs what type of outcome they want. I mostly get the sense they are telling me what I think I want to hear. That looks like…
“I want to grow a big company and IPO.” or “I want to growth a big company and have a big PE exit.”
Come on! That’s not what you want. That’s what you think I want. Today, more that ever, that path is not clear. It’s murky at best.
Fund dynamics and the crazy valuation market of 2021 have made VCs evaluate companies through the lens of their fund or their mistakes, not on the merits of the founder and the business they are looking to fund.
I’d much rather a founder tell me, “I’d love to run hard for 3 years toward $10M in ARR and target $50M-$75M acquisition by one of the platform players in the space.”
Why? It narrows the focus and is very tangible. It’s a timeline and an outcome that’s easy to rally around. That impacts everything! Hiring, operations, finance, sales, marketing… everything! This allows me to build a targeted plan for that founder and their company.
As an investor, it’s simple, the faster you get capital returned, even modest returns, allows you to put that capital to work in other places diversifying your risk. The traditional model of 1 in 10 successful outcomes carrying the whole portfolio in a 10 year period is not only bad for the investor, but the founder as well.
I can’t tell you how my LPs I’ve connected with who’ve told me they’ve had their private allocation locked up with no returns for 5, 10, 15 years… Obviously sucks through the lens of the investor, but think about all of the founders in that same timeframe who have been grinding to meet the metrics of the fund vs. the metrics that could financially change their life forever.
In Revenue Capital was built on two fundamentals.
1. Founder Friendly: that’s looks like hands on GTM support designed around an outcome they want to achieve.
2. Investor Friendly: that looks like returning capital in 2-4 years targeting 3-5x returns.
If you are a founder of a B2B vertical SaaS company, we’d love to talk with you and learn about what you want to accomplish.
If you are an investor looking for returns from private venture investing, we’d love to talk to you as well.
Founder friendly, meet investor friendly.
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