A $5M Seed round now requires a $1B position.
With the IPOs value going over $1-trillion each there is a domino effect also on your startup.
Before VCs would look at the TAM and be satisfied with the $B, now they’ll triple check whether there is a $1B+ position: their stake needs to be valued that.
Given that they’ll go in with ~20% and then dilute to a ~12%, you will need to show a $8B valuation and a clear path to €800M / €1.2B in ARR.
Year 1 = €1M / ARR
Year 2 = €6M / ARR
Year 3 = €36M / ARR
Year 4 = €216M / ARR
Year 5 = €1.2B / ARR
☝️ That is what you are competing against. Your sales forecast being in the range $1B - $1.5B / ARR within 5-7 years.
If your stats don’t support this narrative, you won’t qualify for VC-seed.
The only exceptions I can see:
1) Glorious past: founder with multiple exits, VP at big tech, etc.
2) Deeptech angle. Something that took years to develop due to its computation / hardware constraints.
Everyone else will be measured on their revenue and growth.
So invest in sales, it hardly backfires.
#startup #venturecapital #investing #shorts #viralvideo
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