In episode three of MATH 101, Troy highlights the risk of raising too much capital. Remember, you want to fuel growth, but you don’t want to completely diminish the value to you and your shareholders!
In this example, Troy assumes a $50mm exit — the 2017 average for N. American and European exit activity — across three different scenarios: bootstrapping, raising too much, and raising the proper amount.
2 Responses
Ideas like this is why Chicago is lightyears behind the valley
Dear "Test"
I am not sure why you think Chicago is "lightyears behind the valley" as it has ranked first, the last two years in Pitchbook’s survey of highest Multiple On Invested Capital (MOIC) Here is a link to an article on the data: https://venturebeat.com/2018/10/03/chicagos-startups-continue-to-lead-the-nation-in-return-on-investment/
When the invested capital numbers get out of control, it is difficult to get the returns for the investors and the founders that everyone expects. The amount of capital is not the important number, the returns are!