A tweet thread about debt vs equity since that seems to be a hot topic these days. cc @joshmuccio
1) First, what do these terms even mean? What does it mean to be a debt investor vs an equity investor?
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The VC industry has done a great job marketing themselves so that every online startup thinks they need VC money. (I say this w/ my hat on as a former founder who didn't understand any of this myself just a few years ago)
Have you ever seen an explainer of the types of businesses that need VC and those that ought to be bootstrapped? That’s very much missing from most founders thinking. First time founders don’t know the difference between a “startup” and founding a cash flow out the gate business.
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What is considered to be “vc backable” is subjective...but basically seed VCs are looking for 100x outcomes. (Btwn entry valuation and exit valuation) and for companies to get to $100m per yer in rev by yr 5.
Thanks. Twitter will use this to make your timeline better. UndoUndo
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