VCs Fund Ideas, Not Execution

manishrjain.com

3 pointskaranbhangui2 comments

There are so many factors at play here. The stage matters a lot.

Early stage = idea + team

Mid-stage = idea + team + traction

Late-stage = traction + team

At the later stages the ideas might as well not matter. VCs will seek out high performing “hot” spaces and companies. And if you’re one of those then you’re already on their radar.

"When comparing the money raised against estimated revenue, you see a big factor difference between SQL companies and Graph/Multi-model companies. SQL companies raised at 20-30x (with AirTable “lagging” at 14x), while all Graph/Multi-model companies raised at 4-7x."

This data is from late stages. So, idea/market makes a difference in all stages.

Great team is a subjective idea, just like great product is. It's hard to objectively differentiate -- so traction/revenue becomes a proxy to both of those.

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