Free Solo
“Free Solo”– a cartoon that illustrates the difference in expectations between a startup entrepreneur and a venture capitalist.
A $100M 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 fewer number of startups, hoping that they will deliver outsized returns.
For the entrepreneur, there is a lot of opportunity for glory in achieving multi-$100M or $1BN+ exits, but there is also an even higher chance of failure.
For the venture capitalist, they can make multiple startup bets hoping at least one or two can achieve home runs so that they can raise the next venture fund.
