dhuck, let me clarify. what i am looking for is a clear path to that level of an exit without a company needing to spend more than $1-$2 million. this means getting customer traction, market validation, and revenue momentum. However, I acknowledge that some businesses require a B round to get there. I don't view this as a problem. What i do view as a problem is needing $5-$10 million before you can say "this is a viable business with an attractive exit opportunity." thanks for raising the point. roger
Couldn't agree more with the idea with about ignoring companies that say they need $5-$10 mil in order to be a "viable business." Today's companies (look at ycombinator) can do that with much, much less. $1-$2 mil seems like a good level - more than I would personally need! :)
To restate/clarify my original point (messed up the thread, my bad): getting a valuation of $25 mil to $50 mil, with a TOTAL investment of $1-$2 million is very hard. Google and a few choice companies may have done that, but I think that's definitely the exception. A lot of good companies are out there that aren't Googles (take over the entire market in 5 years) that deserve investment, as well.
These investments might not produce a valuation of $25-$50 mil after 5 years (like Google, etc etc) - but maybe they would after 10, 12, 15 years. This is where I think we agree.
Everything you said makes sense. In fact, I think your requirements should apply at all times, not just during tough market conditions. There's really no excuse for startups not to be lean, agile and cheap. Maximizing output from scarce resources is what entrepreneurship is all about.
