Volset: Sam Altman's $10B startup valuation rule makes no sense
Einar Volset · Einar Volsett on How TinySeed Works · Jun 10, 2020 · at 1:09:24
TinySeed partner Einar Volset disputes Sam Altman's essay on startup investing, arguing that restricting investments to potential decacorns ignores viable, highly profitable software businesses.
0:00 / 0:14exact quote · 14.3s
720p mp4 · rendered on demand · StarZero watermark
“He wrote a piece and I think in January saying how to invest in a startup. And he said, you should never invest in any company that couldn't potentially be a ten billion dollar company. And I'm like, that doesn't make any sense. Like there's a lot of companies and a lot of value creation out there”
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 Einar Volset
Volset: Brokered sales anchor strategic acquirers to lower private equity multiples
“If you really want to get 30 X revenue or 20 X revenue or 15 times revenue it's hard to do that if you're in like a sales process with a broker. Like if a broker is going out to market, then the strategic knows that, okay, there's a floor in pricing because he…”
Volset: A $75M exit at a low valuation reliably delivers 50x returns
“If you're coming in at one and a half million pre, Then a 50 X return is, is the company sells for 75. Now those kind of outcomes are much more doable and much more frequent than you know, you, I, something selling for seven hundred and fifty million or a bill…”
Volset: Most Angel Investors Fail Due to Insufficient Portfolio Diversification
“I personally think that's why most angel investors do really poorly at the early stage of tech investing. It's because they don't have enough portfolio companies in their portfolio.”
Volset: CS academics view leaving for industry as a personal failure
“If you're in CS academia, like, you know, high up and you decide to go to industry, even if you decide not to go to like pure industry, if you go into like industrial research, they almost feel people, you almost get the sense that people feel sorry for you. L…”
Volset: Regional investors struggle because wealth comes from traditional industries
“Part of the problem is, is that the people with money in Silicon Valley typically made it doing early stage startups, you know, and they, so they understand it. Versus people in places like, you know, Vancouver, or Chicago, or, you know, DC, made their money e…”
Volset: Private equity caps SaaS multiples at 10x; higher requires strategics
“If you're growing zero to 20%, then like what is an easy multiple to get, I think is about three X. And then and from 20 up to about 50%, you can probably get four X, maybe five. From 50 to about a hundred percent growth. This is annual growth. You can get any…”