“In order to do that with a three hundred million dollar outcome, it means you have to have invested less than thirty million dollars of capital to get to that point.”
quote is from the automated transcript, cleaned for reading:
filler sounds and stutters are removed, nothing is rephrased. names can be misheard
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More from Frank Rotman
Opinion
Rotman: YC encourages artificial growth for Demo Day, causing VCs to overpay
“A lot of the growth trajectory was in unscalable things in order to get the up and to the right, 45 degree chart so that you can package it for demo day. You know, so there are a lot of artificial things done in order to package it, like you know, to Sam's poi…”
Frank RotmanAug 11, 2023▶ 39:17DEBATE: State of Seed Investing w/ Jason Lemkin, Sam Lessin, Frank Rotman & Harry Stebbings | E1047 · 20VC with Harry Stebbings
PredictionOpen · timeframe Aug 2028
Frank Rotman predicts 20-30% failure rates between early venture stages
“You will have 20 to 30% failure between seed and A. You will have 20 to 30% failure between A and B.”
Frank RotmanAug 11, 2023▶ 5:40DEBATE: State of Seed Investing w/ Jason Lemkin, Sam Lessin, Frank Rotman & Harry Stebbings | E1047 · 20VC with Harry Stebbings
AssertionSupported
Rotman: Venture pricing has corrected across stages, except at seed
“Pricing has slowly started to correct, but it still hasn't corrected at the seed stage.”
Frank RotmanAug 11, 2023▶ 9:42DEBATE: State of Seed Investing w/ Jason Lemkin, Sam Lessin, Frank Rotman & Harry Stebbings | E1047 · 20VC with Harry Stebbings
Insight
Rotman: VCs prefer no-bids over down rounds for overvalued seed startups
“And if pricing doesn't correct at the earliest stage you're going to have a lot of no bids, you know, at the Series A because they wouldn't have gone far enough, fast enough for a Series A investor to come in and say they've earned their way into a significant…”
Frank RotmanAug 11, 2023▶ 11:18DEBATE: State of Seed Investing w/ Jason Lemkin, Sam Lessin, Frank Rotman & Harry Stebbings | E1047 · 20VC with Harry Stebbings
Insight
Frank Rotman: Non-Unlimited TAM Startups Must Achieve Low-Scale Profitability
“Companies need to learn to make money at low levels of scale, right? Either you're in an unlimited TAM market where you can justify putting capital into the business and continuing to pour capital into the business. I think some SaaS companies Like, the TAMs a…”
Frank RotmanAug 11, 2023▶ 15:34DEBATE: State of Seed Investing w/ Jason Lemkin, Sam Lessin, Frank Rotman & Harry Stebbings | E1047 · 20VC with Harry Stebbings
Insight
Rotman: Doubling revenue at higher cost generates anti-proof for startups
“But if it was harder to get that doubling than you thought, or it costs you more to get that doubling than you thought, or your manufacturing costs went up, or the margins weren't there, you know, in that doubling, you're actually generating anti-proof of the …”
Frank RotmanAug 11, 2023▶ 35:24DEBATE: State of Seed Investing w/ Jason Lemkin, Sam Lessin, Frank Rotman & Harry Stebbings | E1047 · 20VC with Harry Stebbings
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