Victor Lang’s Post

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PE & VC Due Diligence | Valuations | Founder @ Verified Metrics.com

A simple way to understand seed venture capital: a founder needs to build a company worth roughly 20x the size of the VC that invests in it. Here’s why: A typical seed stage fund has a 10-year life and will pitch its investors 12% a year (compounding) returns. That means it needs to 3x it’s fund over 10 years. Statistically, it’s likely going to achieve most of that from a single investment, which it will likely own roughly 15% of at exit. So for founders the math is simple. You need to convince a VC that you can build a company that is worth the Venture Capital Fund Size x 20 (or 3/15%) I.e. A $100mm seed fund will be betting you build a $2bn company. The bigger the fund the bigger the number. Keep this in mind when you are pitching.

Kevin Brisebois

CEO at Zefinity | Product Innovation, Design, Manufacturing & Supply Chain Solutions in Asia

2mo

Victor Lang this is pure gold and every founder raising should know this math. Keep the great content coming 🔥🔥🔥

Nickey Khemchandani

Polymath technologist guiding founders and c-suite executives with cutting-edge tech, interoperability solutions, acceleration strategies, and future-proofing internal education for optimal ROI

2mo

Awesome insight Victor Lang !

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