Conversation

Jesse Powell
@jespow
I don't return the company's cash to investors because CASH IS AN ENTERPRISE VALUE MULTIPLIER Consider valuation in these scenarios * $200m cash, 24mos of runway w/ 0 revenue. * $50m, 6mos, 0 * $10m, 1mo, 0 It's insurance and optionality. It's the ability to play the long game
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Ari Paul ⛓️
@AriDavidPaul
Your investors also get similar value from that cash in hand however. The question comes down to whether that cash is more valuable to an investor in their own direct hands, or in your company’s bank account. I.e. apple’s cash hoard distributed to investors could be given to
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aeon
@AeonCoin
Replying to
@jespow
and
@AriDavidPaul
You don't really "have to", as you could raise the funds on demand for such major expenditures, but it does give optionality, as you say, to take action without support of outside investors.
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BrentMartin.eth 🌱🤖🌙
@brentoken
Replying to
@jespow
and
@AriDavidPaul
Depends entirely on the investors strategy. But my personal exp is that VC often wants _be_ that optionality. If needs arise, raise more of _their_ cash. Their option to add fuel for more equity or not. Its control thing - more control over their investments.