Re:Venture Backed or Bootstrapped? There's a Third Way. Just...
by chii on Thursday January 18, 2024 @11:29PM
(#39051569)
> When I offered to buy back shares from early investors
this is obviously a loss for the investor if they accepted. The time value of money is not zero. Unless you're willing to also pay the expected return from such an investment, you'll have just asked them to provide free capital for you with nothing given back.
Re:Venture Backed or Bootstrapped? There's a Third Way. Just...
by cj on Thursday January 18, 2024 @11:42PM
(#39051639)
This is when I break out the worlds tiniest violin :)
I agree with you, but so what?
The expected ROI for any given seed investment is $0. It’s common knowledge at this point that seed investing is a numbers game where nearly all seed investments fail and a tiny percentage return huge.
I consider our investors successful in that we’ll, at a very minimum, return more than they would have seen if they had invested in the S&P 500 over 10 years.
That’s not to say they won’t make money in the future. Their investment still exists, and while I’m not optimizing for a quick exit or extremely fast growth at all costs, we will eventually exit.
Not sure if it will be in 2 years of another 10 years, but we will eventually. At which point they’ll make at least 5-10x their original investment.
When I offered to buy back shares from early investors most said no and opted to keep the shares for a pay day in the future.