The Wisdom Wall

“if you really want to get 30 X revenue or 20 X revenue or 15 times revenue, um, 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 here's what the, the private equity companies and guys…”

“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, uh, you know, you, I, something selling for seven hundred and fifty million or a billion dollars.”

“I personally think that's why most angel investors do really poorly at the early stage of, of, uh, tech investing. It's because they don't have enough, uh, portfolio companies in their portfolio.”

“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. Like, oh, you didn't quite make it, you know, not, not quite…”

“part of the problem is, is that, um, the, the people with money in Silicon Valley typically made it doing early stage startups, you know, and, and they, they, so they understand it. Versus people in places like, you know, you know, Vancouver, or Chicago, or, you know, DC, made their money elsewhere. And, that can…”

“if you're growing zero to 20%, then like what is an easy multiple to get, I think is about three X. And then, uh, and, and from, 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. Um, you can get anywhere from five to five to seven times.…”

“They're sort of levered for growth, right? It's like they raise as much money as we can as quickly as we can. And in order to grow as much as we can and like, let's not, let's forget about, you know, profits or sustainability or really anything. It's just the only thing that matters is growth. Um, and like you…”

“Like, you can have, you know, a sustainable, calm software business that's throwing off cash. Like, that's something that you can build without necessarily having to go ask permission from Silicon Valley VCs in order to do it.”

“I think you probably need to have at least 50 companies in your car to be, to, to have the outcome where, uh, you're expected to have it, like, at least like a five X return on capital.”

“Like people underestimate, particularly in the U S but also elsewhere, how similar, uh, being a professor is to being a startup, like a venture backed startup founder. Cause essentially what you're doing all the time is going out, grabbing money, getting the best people, And trying to get your projects, you know,…”

“the companies are coming to me. They were already YC companies. Usually, they were already funded YC, post-funded YC companies, and so they were wise to how, how, you know, expensive equity was. So they weren't just going to dish it out to somebody for building their iPhone app. That just wasn't going to happen.”

“Like the hardest part of doing remote is like a figuring out if they're any good and then making sure they stay good. Because a lot of the time, like you hire someone, they're amazing for a month. And then all of a sudden, like you clearly cannot be working on this full time anymore. Like you must be taking other…”

“a large part of how to make that kind of a business successful is to make sure that you're pre-qualifying Is make sure that you're pre-qualifying, um, uh, your, your, your customers before you sign them up.”

“Fundamentally, what I realized pretty quickly is that things have changed very much the last 10 years, like certainly even potentially the last five years, in that, so back in, you know, nine, 2010, if you had a, say, a 1,000,002 million ARR B to B SaaS company, um, you know, at, say, breakeven, it wasn't obvious that…”

“Like if you have, say, Uh, juice delivery service that's doing two million a year. And like, are you going to be able to sell that, you know, like for any reasonable amount of money, you know, if you're a breakeven, probably not. No, like it's, you may make some money, like the founders may do okay, but it's not the…”

“No seed investor will, traditional seed investor will give you any money, because their model doesn't work with that.”

“Like if you take a high valuation, 1012, fifteen million dollars, and you raise a bunch of money, that's, that closes off your opportunity to exit for 10, 20, 30, forty million dollars. You simply won't be able to. Like there'll be, usually there are restrictions in place that mean that your investors that came in at…”

“if your net margin is 30% and you can sell the company for five X revenue because of your current growth, then you have to wait 15 years to get the same money out in cash.”