Spiller: VC fundraising cycles drive the startup push for valuation markups
Nick Spiller · 10,000 Investor Meetings Later, He Saw One Same-Day Commitment · Mar 28, 2023 · at 5:39
Nick Spiller of Capital Factory explains to Sean Weisbrot why venture investors pressure early-stage startups to grow aggressively.
0:00 / 0:33exact quote · 33.9s
▶ Watch the full episode on YouTube → 720p mp4 · rendered on demand · StarZero watermark
“They need to generate high growth to justify a 10 X, 100 X return on their investment in these companies to go raise money for their next fund. Right. And it's like a lot of these investors, they're raising money too. And so, you know, they need to see you grow. They need to at least see your valuation get marked up on paper by raising additional funding, because that's the information they're going to go to their investors, their limited partners, their LPs. To try to raise their next fund. And so that drives this growth cycle.”
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 Nick Spiller
Spiller: There will be a recession by the end of 2023
“And that's kind of the expectation going into this year is by the time we're going out of this year, there will be a recession.”
Spiller: A VC's true customer is the LP, not the founder
“The investor's responsibility is to steward the investment. You know, the key word is like the investment, not the company, although they're very, you know, intertwined obviously in the success of the company is the success of the investment investor. Investor…”
Spiller: India Has the Necessary Components to Match China's Manufacturing Scale
“And I think India has all of the, you know, necessary components to be a China, right? And, you know, all, you know, really just need to set up the infrastructure there and, you know, the trade relations.”
Spiller evaluates startups based on cash flows, data, and technology
“I think there's three buckets in which investors value companies.
They value your cash flows, your revenue, your profits.
they value your data and, you know, your customer information and everything, the data surrounding that.
And they value your technolog…”