Suster: Fast-growing startup rejected $350M acquisition offer before crashing to $0
Mark Suster · Mark Suster: Why Private Equity Will Replace IPOs and M&A as the Exit Path | E1147 · 20VC with Harry Stebbings · May 1, 2024 · at 48:50
Mark Suster, General Partner at Upfront Ventures, recounts his biggest career investing mistake caused by over-concentrating capital into a winning company.
0:00 / 0:17exact quote · 17.2s
▶ Watch the full episode on YouTube → 720p mp4 · rendered on demand · StarZero watermark
“And then I had one big company that was incredibly fast growing is the fastest growing company I had ever seen. And so I piled money into it and it ended up being a zero. We had an offer to sell the company for three hundred and fifty million dollars. Founder didn't want to sell market changed and it eventually sold for zero.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Mark Suster
Suster: VCs settled with embezzling founder, getting equity but zero cash
“It's one step worse than that, which is, I know of a company in which the founder embezzled money. Ok, literally stole millions of dollars. In order to not end up in a big legal battle, their VCs ended up settling, and they got all the stock back, but none of …”
Suster: SoftBank, Tiger, Coatue, and Insight marked 60% of 2021-2022 unicorns
“Of the 1260% were marked by four firms, ok? SoftBank, Tiger, Coachu, and Insight.”
Suster: Investors entering generative AI from 2023-2025 won't see strong returns
“So if you're betting on generative AI for the first time in 23, 24, 25, good luck making returns.”
Suster: Founders should avoid demo days and batch fundraising hype
“Like, you've got one company, and there's no divorce clause from investors, so I really think entrepreneurs need to take the time to get to know their investors, which is why I'm not a big proponent of demo days, or overhyping your company, or Waiting to meet …”
Suster predicts party rounds will perform worst over the next three years
“And party rounds did incredibly well. For the last five years, but I suspect party rounds are going to do the worst for the next three years, because getting conviction across three or four small investors that each own seven, eight, nine, 10% of your company …”