I don't know much about VC, but these sorts of claims are always surprising to me. Is it really moonshots or bust when you raise a VC round?
Even with a 2x liquidity preference, don't you just need to double the invested amount in order to have personally broken even on the VC deal?
Say you have a $10M business (pre-money), and you raise $5m at a 2x liquidity preference, giving up 50% of the company in the process. That would leave you with a $15M post-money valuation. So long as you can use that $5M to turn you from a $15M business into a $20M business, didn't you just break even on the deal?
I'm know it's not an outcome that the VC is looking for, but it would seem to be a fine outcome from the founder's perspective.
Even with a 2x liquidity preference, don't you just need to double the invested amount in order to have personally broken even on the VC deal?
Say you have a $10M business (pre-money), and you raise $5m at a 2x liquidity preference, giving up 50% of the company in the process. That would leave you with a $15M post-money valuation. So long as you can use that $5M to turn you from a $15M business into a $20M business, didn't you just break even on the deal?
I'm know it's not an outcome that the VC is looking for, but it would seem to be a fine outcome from the founder's perspective.