How much should entry price weigh in an investment decision relative to other factors?

Mark Suster · May 1, 2024

Entry price discipline is essential because the eventual buyers are professional investors who pay rational prices — you cannot pay irrational entry prices and sell into rational exits

PE buyers must make a return, so they will only pay rational prices; median entries of 11–12 pre versus market prices of 25–40 pre is what preserves the ability to make money

26:33 20VC: Mark Suster on The Biggest Fundraising Lessons for VCs, Why the Correction in Venture is Still to Come, Why Private Equity Will Replace IPOs and M&A as the Exit Path & The Woke Left and a Trump Administration; What Happens?

David Frankel · Oct 14, 2024

You cannot make money running a seed fund at today's AI seed prices — $5M on $20M is investable, $25M on $100M is not

The entry valuations simply don't support seed fund economics

Scope: rare exceptions for teams you cannot ignore, roughly 1% of the time

48:40 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective

Harry Stebbings · Oct 14, 2024

A seed manager cannot justify investing at a $250M entry price — even a $5B outcome doesn't work after dilution

The multiple after dilution is too small to matter for a seed fund

Scope: acknowledges the counterfactual of a $50B outcome

49:12 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective

David Frankel · Oct 14, 2024

Breaking your valuation discipline can pay off enormously, but entry price determines everything — being right at a $250M post yields a fraction of the return of being right at a $10M post

The same correct call produces radically different fund-level returns depending on the entry valuation; a 2x on a billion-dollar entry is not a fund-maker even if the company is 'the company'

Scope: applies to seed-stage fund strategy

50:00 20VC: Investing Lessons from FC Seeding Uber, Airtable and Coupang | Why Pro Rata is the Original Sin in VC | Why Liquidity Has Died in 2024 | Why LPs are Pissed with VCs | The Hard Truth About Seed Fund Economics with David Frankel @ Founder Collective

Harry Stebbings · Nov 20, 2024

Paying twice as much at entry would have halved the fund's multiples

11:58 20VC: Turning $16.5M into $2.1BN; Lessons from the Greatest Venture Investment in European History: UiPath | Why VC is Not Being Commoditised | Why Price Does Not Matter | Lessons on Loss Ratio, Selling and Signalling with Cem Sertoglu

Mike Maples · Jan 6, 2025

Entry price directly determines the exit outcome a seed fund needs, and the physics of what a good venture fund looks like has not changed despite claims that today's market is different

He has studied venture returns over the last fifty years and the underlying return math has not changed; dilution is forecast into the model, so a $25M entry price sets the required exit

15:46 20VC: How To Do a 10x Seed Fund in 2025 | Three Frameworks to Evaluate Startups an Founders | Lessons from Losing Billions Missing Airbnb and Pinterest & Investing Lessons from Charlie Munger with Mike Maples @ Floodgate

Larry Aschebrook · Jun 16, 2025

The 2020 vintage's problem was price paid, not asset quality — most of the underlying companies are still fundamentally good businesses

They saw they had overpaid on the first tranche of capital, so they topped the fund up from $1.2B to $1.5B to combat it with secondaries and structure rather than because they had lost faith in the companies

Scope: some positions went on to be monumental, well-publicized failures

45:40 20VC: How We Made $800M on Coursera | We Lost Money on Uber and Made Money on Lyft | We Did 3x on Postmates in 18 Months | DPI is King, MOIC is BS | We Dodged Theranos and I Still Lost Millions with Larry Aschebrook @ G Squared

Max Altman · Nov 21, 2025

Investors should be extremely price sensitive at seed, because paying twice the price effectively halves the number of bets you can make

A fund gets roughly 25 bullets; doubling entry price halves them, which is a tough way to invest

Scope: concedes a fund cannot fully sit out high-priced deals

37:06 20VC: Max Altman on The New Seed War: Can Anyone Compete with Sequoia and a16z | Leaving $2BN on the Table with Reddit | Lessons from Backing Rippling at $25M Post | Why Climate Tech is a Mirage and Disaster

Mitchell Green · Mar 7, 2026

The discipline that keeps you out of trouble is only investing when you'd be 'in the money' eighteen months out at a reasonable multiple, not one requiring a 30-40x revenue exit

If a company growing 60% a year gets you in the money at six to eight times revenue in eighteen months that's a sound entry; if you need 30-40x revenue just to break even, the price is wrong

30:22 20VC: Why the SaaS Apocalypse is BS | Why China Will Win the AI War | Why 50% of VCs Should Not Exist and are Tourists | Why Stock-Based Comp is the Hidden Sin of the Valley with Mitchell Green, Lead Edge Capital

Mitchell Green · Mar 7, 2026

A good company and a good investment are fundamentally different things; there are many A-plus companies available only at terrible prices

Returns come from the union of company quality and entry price, not quality alone

31:11 20VC: Why the SaaS Apocalypse is BS | Why China Will Win the AI War | Why 50% of VCs Should Not Exist and are Tourists | Why Stock-Based Comp is the Hidden Sin of the Valley with Mitchell Green, Lead Edge Capital

Mitchell Green · Mar 7, 2026

The claim that 'you never make money on a good deal' is wrong — a B-plus company bought at a great price generates amazing risk-adjusted returns, while great companies bought at stupid prices lose money

Plenty of people invested in great companies in 2020 and 2021 at really stupid prices and didn't make money; returns are the intersection of asset quality and price

Scope: not arguing for buying D assets at any price

31:39 20VC: Why the SaaS Apocalypse is BS | Why China Will Win the AI War | Why 50% of VCs Should Not Exist and are Tourists | Why Stock-Based Comp is the Hidden Sin of the Valley with Mitchell Green, Lead Edge Capital

Gili Raanan · Mar 28, 2026

Larger outcome sizes do not change the underlying probability facts of early-stage investing, so investors and LPs should stay realistic about the lasting impact of high entry prices

Venture is a game where we know very little at entry — analyzing product ideas and markets is mostly analyzing smoke because founders change direction within weeks

Scope: accepts the bigger-outcomes argument as legitimate

10:43 20VC: The Venture Model is Broken | You Need to be Greedy and Selfish to Win Early Stage Investing | Why Margins Do Not Matter for Early-Stage Startups | The Growth Rate that is Required in a World of AI with Gili Raanan, Founder @ Cyberstarts

Gili Raanan · Mar 28, 2026

Selfishness and greed are good traits for an early-stage investor, not negative ones

Early-stage investing is essentially the exercise of the science of greed by design, and price is an important consideration

Scope: specific to early stage

13:46 20VC: The Venture Model is Broken | You Need to be Greedy and Selfish to Win Early Stage Investing | Why Margins Do Not Matter for Early-Stage Startups | The Growth Rate that is Required in a World of AI with Gili Raanan, Founder @ Cyberstarts

Marcelo Claure · Jul 31, 2023

Being stubborn on valuation is a costly investing mistake — passing on Nubank over price was wrong

They were stubborn on valuation, the founder was more stubborn, they backed another horse that underperformed, and the miss was inside his own region and area of knowledge

Scope: framed as his own biggest miss

46:13 20VC: Marcelo Claure & Shu Nyatta on Lessons from Investing $7.5BN at Softbank & Why Dumb Money has Gone, Why "LATAM is Under Construction" and the Next 10 Years Will Be the Best & Investing Lessons from Missing Nubank & OpenAI & Investing in FTX

Jason Lemkin · Aug 9, 2023

Passing on a company that's performing well because its valuation is somewhat higher is the worst mistake an investor can make

In any segment of the market, the companies doing better will command higher valuations, so a high price is often a signal the company is great

Scope: within a range — a $700M pre is genuinely tough; applies to a ~$30M post seed deal where everything is going well

11:44 20VC: The Memo: The State of the VC Market: Why Seed Funds Can't Invest in "Hot Startups" Anymore, Why Series A & B is Terrible, Why the IPO Market Will Explode in 2024 & Why VC DD is BS & Every VC Has More Fraud in their Portfolio with Jason Lemkin

David Tisch · Feb 5, 2024

Passing on the best company because of a high seed price is a mistake; returns come from being in the biggest, best companies regardless of entry price

If the company raising at a $100M seed valuation turns out to be the $100B outcome, the price discipline that made you say no was the error

Scope: applies to the genuinely best companies in a cohort

0:00 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan

David Tisch · Feb 5, 2024

Having hard structural rules about what you'll fund limits your access to the best companies, so you cannot categorically refuse a round like $10M on $100M at seed if you believe it's the generational company.

The math of venture is that returns come from being in the biggest, best companies; refusing the one that becomes a $100B outcome is the costly mistake, even though saying yes when it becomes a $200M company is also a mistake.

Scope: acknowledges yes can also be a mistake if the company underperforms

19:42 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan

David Schneider · Sep 11, 2024

Being price-disciplined cost him more than overpaying did — he passed on companies at A, B and C for being expensive and ended up buying at the D, and expensive companies are usually expensive for a reason

When the combination of founder, market and team is there, the price is justified; his fear of overpaying in 2021 made him miss earlier entries into companies that kept pivoting correctly

Scope: you must be deeply convinced the team and founder can keep going; he did also overpay in 2021

42:02 20VC: Scaling ServiceNow to $5BN in ARR | Leadership Lessons from Doug Leone, Frank Slootman and Bill McDermott | VC Value Add: Is it Real and Why the Worst VCs are "Seagull VCs"

Eric Vishria · Sep 25, 2024

An investor isn't entitled to say they'd do a deal at one price but not a modestly higher one — that kind of price-based claim doesn't hold up in venture

He was told this by Fenton on one of his first Benchmark investments and has since passed the same lesson to new partners in his own words

51:47 20VC: Benchmark's Eric Vishria on Where is the Value in AI: Chips, Models or Apps | Why Nvidia Will Not Be The Only Game in Town | The Commoditisation of Foundation Models | Which AI Apps Have Sustaining Value vs Hype and Short Term Revenue

Bucky Moore · May 5, 2025

The best companies always feel expensive at the time of investment

Their top-line uniqueness — billions in run rate growing over 100% year over year — is unprecedented, so price optics mislead

0:00 20VC Exclusive: Why Mega Platforms Will Win in VC | Why You Cannot Do VC If You Do Not Do Pre-Seed | Why Market Sizing is BS | Where Will Foundation Models Build/Buy Apps vs Where Will They Not with Bucky Moore

Bucky Moore · May 5, 2025

When a company has demonstrated a path to market leadership, you should build conviction and go all in even if the price exceeds what you can rationalize

History shows the best companies always feel expensive yet compound for a very long time, and there is always someone who will believe more than the field, so price discipline can cost you the asset

Scope: at the earliest stages the error rate in identifying special companies is higher, giving some reason for more constrained thinking on price

17:48 20VC Exclusive: Why Mega Platforms Will Win in VC | Why You Cannot Do VC If You Do Not Do Pre-Seed | Why Market Sizing is BS | Where Will Foundation Models Build/Buy Apps vs Where Will They Not with Bucky Moore

Alex Rampell · Jan 12, 2026

Doing a quick-succession round at a stepped-up price is justified when the company is a winner, because it is even more expensive not to do the deal

If you've identified the winner, passing on the round costs you more than the higher price does

Scope: would have preferred to invest at the earlier seed or Series A; calls the 60-day gap 'unfortunate'

38:18 20VC: a16z's $15BN Fundraise with Alex Rampell | The Best Companies Have Hostages Not Customers | The Best Founders Materialise Capital, Customers and Labour | Mid-Sized Funds with Die and The Future of Venture Capital

Miles Clements · Mar 9, 2026

Accel's rigid valuation rules for vertical SaaS (never pay more than 6-8x, or 10x, forward) caused them to lose ServiceTitan, which became a $9BN company — understanding market depth should have overridden the price rule

They got cued on price while chasing the round instead of underwriting what the company was disrupting

17:55 20VC: Inside Accel's $4BN Growth Investing Machine | Cursor is Dead is Total BS: Here is Why | What Missing Rippling and ElevenLabs Taught Us | Are $2BN-$10BN IPOs Dead | Why Now is a Great Time to be Thoma Bravo with Miles Clements

Frank Rotman · Aug 26, 2021

Deciding when to pay up requires conviction and knowing when to bend your own rules rather than applying fixed price limits

The environment has shifted so fast that prices he thought were the highest possible turned out to be the lowest by a factor of two

20:02 20VC: Has Price Discipline Disappeared? Is it Possible to Build Ownership Over Time? Why Venture Is Less Collaborative Now Than Ever? How fast Do Breakout Companies Become Obvious? How To Construct an Optimised and Repeatable Investment Decision-Making Pr

Tomasz Tunguz · Apr 21, 2023

An investor who knows a market better than anyone else should be willing to pay a higher price than anyone else

Deeper market knowledge narrows the range of expected outcomes, which raises your certainty in the bet — and the more you know an option is in the money, the more valuable it is

21:57 20VC: Who Wins in AI; Startup vs Incumbent, Infrastructure vs Application Layer, Bundled vs Unbundled Providers | From 150 LP Meetings to Closing $230M for Fund I; The Fundraising Process, What Worked, What Didn't and Lessons Learned with Tomasz Tunguz

Sarah Tavel · May 6, 2024

If you are using price to get yourself comfortable with a deal, you probably shouldn't do the deal

49:12 20VC: Benchmark's Sarah Tavel on Are Foundation Models Commoditising | Why Frontier Models Will Be Closed Source | Why the Value is in the Application Layer | The Future of AI is "Selling the Work" Not the Tools

Harry Stebbings · May 6, 2024

Price should be used as a litmus test for your own conviction

49:22 20VC: Benchmark's Sarah Tavel on Are Foundation Models Commoditising | Why Frontier Models Will Be Closed Source | Why the Value is in the Application Layer | The Future of AI is "Selling the Work" Not the Tools

Mamoon Hamid · Oct 21, 2024

A $35M post-money round for a repeat founder of Arvind Jain's caliber is fair, but a $200M post-money round for the same profile is not something he'd do

He isn't trying to get a deal; he wants partners who see the world the same way and are focused on creating a bigger pie rather than short-term maximal pricing

Scope: seed/early stage; specific to founders like Arvind Jain and Syed Ali

37:16 20VC: Kleiner Perkins' Mamoon Hamid on Investing Lessons from Leading Rounds in Figma, Slack and Rippling | Lessons Building a Generational Defining Firm with Kleiner Perkins | AI: Where Value Accrues, Startups vs Incumbents & Scaling Laws

Peter Singlehurst · Mar 19, 2025

Being a disciplined investor means being judicious about when you pay a high price, not refusing to pay high prices or to look at expensive areas

If you can build conviction that a company can be a breakout success you should lean into valuation; the danger is convincing yourself every company is special

Scope: requires genuine conviction on a specific company

18:11 20VC: The 10 Question Framework a $217BN Manager Uses to Make Investment Decisions | Lessons from Turning Down Stripe, Coinbase and Losing Money on Northvault | The Bull Case for Bytedance | How Anduril Could Be a $200BN Company with Peter Singlehurst

Nabeel Hyatt · Apr 4, 2025

Valuation is primarily a test of conviction — if you like a company at 60 but not at 65, that reveals a conviction problem rather than a pricing problem

Small price deltas shouldn't change the decision if you actually believe; there is still some price at which the economics stop working

Scope: he is not very price sensitive; there is always some price that breaks the math

39:24 20VC: Why To Win in AI, Investors Need to Change Their Approach | Why VC is Run by Principals and Associates and is a Broken System | The Bull Case for Anthropic & Whether Deepseek Changes Their Strategy with Nabeel Hyatt @ Spark Capital

Hemant Taneja · Sep 22, 2025

Price is almost never a legitimate reason to pass: investors invoke price discipline as cover when they failed to gain conviction elsewhere

In 25 years he has never seen an investor actually get price right; returns are made when outcomes are better than anyone modeled, so if a company is destined for greatness you should jump in

Scope: framed as within his own firm's experience

54:16 20VC: General Catalyst CEO Hemant Taneja on The Future of Venture Capital: Chanel vs Walmart | Lessons Scaling GC to $40BN in AUM | Investing $5BN+ Into Stripe Over 14 Rounds | Investing Hundreds of Millions into Anthropic at $60BN Valuation

Harry Stebbings · Nov 10, 2025

Price is a litmus test for your conviction in an investment

Scope: Harry repeats and endorses it as a framework he uses weekly

5:11 20VC: Benchmark's Newest General Partner Ev Randle on Why Margins Matter Less in AI | Why Mega Funds Will Not Produce Good Returns | OpenAI vs Anthropic: What Happens and Who Wins Coding | Investing Lessons from Peter Thiel and Mamoon Hamid

George Zachary · Oct 12, 2020

Investors should allow themselves flexibility on price, but should draw the line when valuations quintuple versus a few years prior — e.g. a Series A that was $20M now priced at $100M

Stage labels and prices have inflated: twenty years ago a seed deal was $300,000 for a deck and a prototype, which is what people would call a Series A today

Scope: some pricing flexibility is warranted

6:41 20VC: CRV's George Zachary on His Relationship To Money and How it has Changed Over Time, Why The Best Founders Have Often Experienced Parental or Home Instability and The Stories Behind Investing in Unicorns; PillPack, Yammer and Udacity

Harry Stebbings · Aug 26, 2021

Prices in today's market, especially in fintech, are crazy, leaving a genuine dilemma between staying disciplined and playing the game on the field

Scope: speaking from his own current investing experience

16:12 20VC: Has Price Discipline Disappeared? Is it Possible to Build Ownership Over Time? Why Venture Is Less Collaborative Now Than Ever? How fast Do Breakout Companies Become Obvious? How To Construct an Optimised and Repeatable Investment Decision-Making Pr

Ophelia Brown · Mar 17, 2023

Price differences at the margin don't matter much once you've decided a company is one of the few you want to partner with, but paying so far up that the company can no longer be material to the fund is stretching too far

Only a finite number of outcomes matter each year, and with a concentrated 15-20 company portfolio and a 20% ownership target, the position has to be big enough to matter to the fund and its LPs; price should be a function of how much capital the business needs for the next 24 months

Scope: specific to Blossom's concentrated fund model; targets 20% ownership

26:13 20VC: Why Growth Investors Ruined the Venture Market, Why Marketing in Venture Has No Substance, Why Follow-On Investing Can Damage Returns and The Mistakes VCs Made in the Last 18 Months with Ophelia Brown, Founder @ Blossom Capital

Eric Paley · Sep 20, 2023

Price should be treated as one attribute among many in a decision, and passing on companies you like because the risk-reward is bad is correct even though you will regret some of those passes

If you always paid whatever was asked whenever you liked something, that would not be a good expression of the work of investing; at Series A prices there's a strong chance the company won't be worth more than what the founder is asking today

Scope: willing to pay up for founders they really want to work with; indexed to market conditions; accepts some regretted passes

37:43 20VC Roundtable: Is the VC Model Broken? The Biggest Disconnect Ever Between TVPI & DPI, Why Market Size is Dangerous, Why "Go Fast" is Terrible Advice, The Dangers of Raising Large Rounds at High Prices & Why Next Year Will See the Biggest Hiring Spree i

David Tisch · Feb 5, 2024 · hedged

Valuation matters at the blended portfolio level rather than deal by deal: a $50M average entry point is too high, but a $3M average suggests you didn't have access to the best companies in that vintage.

The hope as an early-stage manager is to own the most at the cheapest valuation in the best companies, but that mix isn't in your control, so fixed objective rules aren't how they operate.

Scope: says 'probably'; a reasonable middle ground rather than a fixed band

23:02 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan

Cem Sertoglu · Nov 20, 2024

Entry valuation barely matters to the outcome of a fund's best investments, yet a firm still cannot operate without price discipline and a working view of fair value.

Retrospective analysis shows paying twice as much at the seed for their biggest winners wouldn't have changed the fund's fate, but they still must ask whether an entry price is fair or whether the round is being bid up by cycle dynamics.

Scope: holds two opposing thoughts simultaneously; they have passed on price and have a mixed track record on whether that was right

13:22 20VC: Turning $16.5M into $2.1BN; Lessons from the Greatest Venture Investment in European History: UiPath | Why VC is Not Being Commoditised | Why Price Does Not Matter | Lessons on Loss Ratio, Selling and Signalling with Cem Sertoglu

Miles Clements · Mar 9, 2026

Investors have flocked to the extremes — AI maximalism at any price, or sitting on hands over valuations — while the best investors embrace nuance and land in the middle

Ownership, founder quality, and market all factor in alongside growth; a portfolio can hold both low-ownership breakout leaders and bootstrapped companies with different ownership thresholds

Scope: easier for a multistage, multi-strategy firm

15:05 20VC: Inside Accel's $4BN Growth Investing Machine | Cursor is Dead is Total BS: Here is Why | What Missing Rippling and ElevenLabs Taught Us | Are $2BN-$10BN IPOs Dead | Why Now is a Great Time to be Thoma Bravo with Miles Clements

Saam Motamedi · Jul 15, 2024

Seed pricing at 20-40 post for high-quality teams, even for companies incorporated last week, is rational

The 2020-2023 period made people forget the power law: very few companies matter and the ones that do are far bigger than expected, so the only outcomes where the price difference matters are intermediate ones that are irrelevant to fund returns

Scope: may not hold for very small funds; applies to teams with a chance of building an iconic enduring company

25:28 20VC: Why We Are in a Bubble & Now is Frothier Than 2021 | Why $1M ARR is a BS Milestone for Series A | Why Seed Pricing is Rational & Large Seed Rounds Have Less Risk | Why Many AI Apps Have BS Revenue & Are Not Sustainable with Saam Motamedi @ Greylock

Cem Sertoglu · Nov 20, 2024

Entry price barely matters for the outcomes that drive returns — paying twice as much for the UiPath seed would still have produced a fantastic outcome, and he would take half of a 2.1BN return any day

Analysis of their biggest outcomes shows doubling the first-check price wouldn't have meaningfully changed the result; at those multiples halving is irrelevant — it's the power law in action

Scope: holds this alongside the contradictory belief that discipline on price matters; applies to the biggest outcomes / power-law winners

11:58 20VC: Turning $16.5M into $2.1BN; Lessons from the Greatest Venture Investment in European History: UiPath | Why VC is Not Being Commoditised | Why Price Does Not Matter | Lessons on Loss Ratio, Selling and Signalling with Cem Sertoglu

Harry Stebbings · Jun 16, 2025

With today's elasticity of outcome sizes — companies reaching one to two trillion dollars — entry valuation of 10 versus 15 billion barely matters

The upside distribution has changed so much in the last five years that entry price discipline matters less than it did in a normal world

Scope: concedes Larry's price-discipline point holds in a 'normal world'

32:40 20VC: How We Made $800M on Coursera | We Lost Money on Uber and Made Money on Lyft | We Did 3x on Postmates in 18 Months | DPI is King, MOIC is BS | We Dodged Theranos and I Still Lost Millions with Larry Aschebrook @ G Squared

Martin Mignot · Aug 11, 2025

You should never lose or pass on an early-stage deal because of price

Scope: early stage specifically

30:24 20VC: Figma, Scale, Wiz: Inside Index's Decacorn Factory | Decision-Making, Investment Process, Biggest Lessons, Biggest Misses | Why Gross Margin is a Fallacy at Seed | Never Turn Down a Deal on Price with Martin Mignot, Partner @ Index Ventures

Harry Stebbings · Oct 22, 2025

Venture is the most forgiving business on purchase price because upside is exponential, unlike private equity where upside is banded at two to three times

If you overpay by 50% but execute well, the exponential upside makes the entry price immaterial

Scope: assumes the acquisition is executed well

50:29 20VC: Deel CEO Alex Bouaziz on Raising $300M+ at a $17BN Valuation | Deel vs Rippling: WTF is Going On | Management Lessons from Ben Horowitz and Nik Storonsky | Deel's M&A Playbook: Lessons from 13 Acquisitions: What Works & What Doesn't

Jason Lemkin · Sep 20, 2023

Pricing rules and discipline heuristics are largely beside the point in venture, because returns come from outliers and a good entry price on a non-outlier changes nothing

Venture is a business of outliers; a Series A at 30 post instead of 60 doesn't matter if the company isn't an outlier

Scope: acknowledges the rules are 'accurate' on paper

35:55 20VC Roundtable: Is the VC Model Broken? The Biggest Disconnect Ever Between TVPI & DPI, Why Market Size is Dangerous, Why "Go Fast" is Terrible Advice, The Dangers of Raising Large Rounds at High Prices & Why Next Year Will See the Biggest Hiring Spree i

Terrence Rohan · Feb 5, 2024

The scarce thing in venture is conviction in a company, not price — if you have conviction you write the check regardless of a $10M, $20M or $100M valuation.

The power law is the one indisputable empirical law of venture, and returns come from the exit price of the rare winner, so the job is finding those companies.

21:12 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan

Harry Stebbings · Sep 25, 2024

Price is a mental trap for investors

51:44 20VC: Benchmark's Eric Vishria on Where is the Value in AI: Chips, Models or Apps | Why Nvidia Will Not Be The Only Game in Town | The Commoditisation of Foundation Models | Which AI Apps Have Sustaining Value vs Hype and Short Term Revenue

Lucas Swisher · Feb 23, 2026

Price matters in growth investing, but it matters least among the factors that determine returns

0:00 20VC: Inside Coatue's $70BN Machine: Why Price Matters Least | Why Mega Markets are the Most Important | How to Assess Durability of Revenue and Margins in AI with Lucas Swisher

Lucas Swisher · Feb 23, 2026

Price always matters, but it matters least among the variables

For generational companies it's almost never too late, and if you're instigating and preempting rounds you can help set the right price at any given moment

Scope: there is a delineation point where returns erode enough that you pass; assumes you are the one preempting the round

19:14 20VC: Inside Coatue's $70BN Machine: Why Price Matters Least | Why Mega Markets are the Most Important | How to Assess Durability of Revenue and Margins in AI with Lucas Swisher

Larry Aschebrook · Jun 16, 2025

Growth-stage investment criteria must be quantitative and cut-and-dry; their pre-2021 guardrails failed because they leaned too much on gut, feel and who else was in the round

At growth stage entry price determines whether you clear a 2.5x net over five years, unlike seed where paying 10 or 50 pre still leaves a 5x on a good business

Scope: contrasts growth stage with early stage, where entry price matters less

31:28 20VC: How We Made $800M on Coursera | We Lost Money on Uber and Made Money on Lyft | We Did 3x on Postmates in 18 Months | DPI is King, MOIC is BS | We Dodged Theranos and I Still Lost Millions with Larry Aschebrook @ G Squared

Mitchell Green · Mar 7, 2026

Whether to keep investing through this uncertainty depends on your business model: early-stage funds underwriting 100x outcomes should keep investing, while growth investors underwriting 2-5x should not, because entry prices around 100x revenue mean eighteen months of great execution still leaves you out of the money

Lead Edge targets 2-5x in three to seven years for a ~25% IRR and takes almost no zeros, so entry multiple determines whether growth can bail you out

Scope: specific to different fund strategies

11:07 20VC: Why the SaaS Apocalypse is BS | Why China Will Win the AI War | Why 50% of VCs Should Not Exist and are Tourists | Why Stock-Based Comp is the Hidden Sin of the Valley with Mitchell Green, Lead Edge Capital

Mitchell Green · Mar 7, 2026

You should not become more price-elastic on early entry just because trillion-dollar outcomes exist, because the vast majority of companies never become that

Most companies don't reach those outcomes; the right strategy depends on the return contract you've set with your LPs — his is 2-5x in three to seven years and 2-2.5x net funds

Scope: acknowledges it depends what you tell your LPs

33:09 20VC: Why the SaaS Apocalypse is BS | Why China Will Win the AI War | Why 50% of VCs Should Not Exist and are Tourists | Why Stock-Based Comp is the Hidden Sin of the Valley with Mitchell Green, Lead Edge Capital

Gokul Rajaram · Mar 16, 2026

Investing in frontier model neolabs at billion-dollar first rounds is not worth the risk-reward for a fund like his

The entry valuation makes the achievable ownership too small relative to the risk

Scope: specific to his fund size and strategy

67:17 20VC: The 8 Moats of Enduring Software Companies: How to Analyse for Durability and Defensibility in a World of AI | Why Dropouts are "AI Maxing" the World & Remote Early-Stage Companies are Dying with Gokul Rajaram

Jeremy Liew · Feb 24, 2021

With companies showing incredible upside volatility, anchoring on a recent valuation is the wrong way to think — what feels like a high valuation today would be a fair valuation a quarter later at current growth

They anchored on having invested thirty days earlier at $4.25M pre and balked at $13M, when the growth rate meant that price was about to look fair; conviction in the team and vision should have dominated

Scope: applies to companies with incredible upside volatility where everything is going right

32:35 20VC: The Snapchat Memo: Lightspeed's Jeremy Liew on The 4 Key Elements To Consider When Evaluating A Consumer Social Product, What is Good/Great/World Class For Retention, Usage and Downloads in Consumer Social Today & The Core Insight Development of Eva

Frank Rotman · Aug 26, 2021

Extraordinarily high-growth companies are the hardest to price because you are underwriting an almost unbelievable plan and trajectory rather than proven results

Companies today grow far faster than in the past — in 2008-2010 the best grew 2x year over year, whereas now a company can double or triple between term sheet signing and final documentation

20:29 20VC: Has Price Discipline Disappeared? Is it Possible to Build Ownership Over Time? Why Venture Is Less Collaborative Now Than Ever? How fast Do Breakout Companies Become Obvious? How To Construct an Optimised and Repeatable Investment Decision-Making Pr

Mitchell Green · Mar 28, 2025

Investors should underwrite entry price by asking whether, 12–18 months of growth from today, they are still in the deal at a defensible multiple

Toast at 20x revenue growing 250% meant they were in at ~10x within a year, which was reasonable for that growth rate; paying a price where you're still at 50–80x in twelve months is not

33:43 20VC: Why Traditional VC is Broken: How VCs Learned Nothing from 2021 | Why LPs are More Important than Founders & Advice to Emerging Managers | Bull Case for Bytedance & Why TikTok's Ban Doesn't Matter with Mitchell Green, Lead Edge Capital

Brendan Foody · Sep 15, 2025

Valuation should be judged by what a company could possibly achieve rather than through market comps and revenue multiples

With meteoric growth, multiples look insane at the time but investors who talked to customers saw the experiences and growth would continue — Mercor is now 25x larger in revenue than at the Series B

Scope: especially for companies with meteoric growth

28:29 20VC: Mercor: From $1M to $500M in 17 Months: The Fastest Growing Company in the World | How to Think About Margins and Revenue Sustainability in AI | Why Evaluation Benchmarks in AI are BS Today with Brendan Foody

Everett Randle · Nov 10, 2025

Sequoia's Figma investment at ~100x ARR was an unbelievable investment despite universal derision at the time, because the multiple compressed to 30-40x as the company grew into it.

52:01 20VC: Benchmark's Newest General Partner Ev Randle on Why Margins Matter Less in AI | Why Mega Funds Will Not Produce Good Returns | OpenAI vs Anthropic: What Happens and Who Wins Coding | Investing Lessons from Peter Thiel and Mamoon Hamid

Lucas Swisher · Feb 23, 2026

When a company is growing exponentially, valuation should be the last question you answer, not the first

A price that looks insane at $20M ARR looks extremely cheap if revenue goes 20M to 200M to 600M to 3B; the real job is identifying which companies are on that curve

Scope: applies to companies growing 10x-50x year on year; valuation still has to be considered by everyone

12:49 20VC: Inside Coatue's $70BN Machine: Why Price Matters Least | Why Mega Markets are the Most Important | How to Assess Durability of Revenue and Margins in AI with Lucas Swisher

David Tisch · Feb 5, 2024 · hedged

Price starts to matter at Series B.

Scope: offered tentatively as a one-line answer

22:53 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan

Terrence Rohan · Feb 5, 2024

Price really matters in growth and crossover investing, but that is a fundamentally different game from early stage.

22:54 20VC: The Biggest Misconceptions & Hardest Truths About Seed Investing Today; Why The Best Founders Don't Need You, Why Uncapped SAFEs Are Good, Why Reserves Are Bad, Why Signalling is BS, Why Price Doesn't Matter with David Tisch & Terrence Rohan

Danny Rimer · Jun 17, 2024

There is a lot of room to stretch on price in early rounds when you have conviction, but much more valuation discipline is required in later-stage growth rounds

Multiples are harder to achieve at growth stage

Scope: early-stage stretching conditional on conviction

39:48 20VC: Index's Danny Rimer on Investing Lessons from Hits like Figma, Discord and Etsy to Missing Snapchat, Airbnb, Facebook & Spotify | Why Valuation is a Trap and Market Sizing, Signalling and Sector/Geo-Specific Funds are all Noise

Harry Stebbings · May 8, 2023

Passing on deals last year on the basis of price was the right decision

Looking back at every deal he didn't do because of pricing, he is grateful — for the first time in his career — not to have done them

Scope: about deals passed on in the prior year

14:10 20VC: Why VC Subsidizes the Wrong Type of Business, Why Capital Gains Tax is Crazy, The Biggest Misalignments Between VCs, Founders and LPs, Why Business Model - Product Fit is as Important as Product-Market-Fit with Chris Paik @ Pace Capital

Harry Stebbings · May 27, 2024

A great founder is not sufficient — if the deal terms are bad enough (e.g. a $150M price), you should pass

53:58 20VC: Why Seed is Systemically Broken | Why Pricing is Worse Than Ever and There is More Funding Than Ever | Benchmarks for Churn, Retention and Growth Rates - Good vs Great | Why Last Vintage for Private Equity Will Suck with Jason Lemkin

Jason Lemkin · Jan 4, 2024

Mamoon Hamid is a top 0.1% traditional investor because he never lowers the bar — no deals for fees or to fill a quiet quarter — and will pay up for a genuine outlier

He is a heat-seeking missile for Slack/Figma/Rippling-class companies and will mark a deal up rather than miss it, whereas most investors can neither identify those companies nor summon the confidence to pay

21:58 20VC: Predictions for 2024: What Happens to Early Stage VC Funding, Do a Load of Venture Funds Die, What do LPs Do in 2024, Does Figma Kill the M&A Market, Will IPOs Comeback & What Does a Trump Administration do for Startups with Jason Lemkin @ SaaStr

Sarah Tavel · May 6, 2024

You should pay up when you believe the company and founder can escape competition through network effects, a strong moat, or economies of scale — if you like everything but the price, you pay the price

Escaping competition is what determines whether the outcome justifies the entry price

48:27 20VC: Benchmark's Sarah Tavel on Are Foundation Models Commoditising | Why Frontier Models Will Be Closed Source | Why the Value is in the Application Layer | The Future of AI is "Selling the Work" Not the Tools

Everett Randle · Nov 10, 2025

Price should be judged on the investment's absolute upside — TAM, competitive position, probability of the good case — not on how it compares to prevailing market pricing for the stage.

Anchoring to market norms (e.g. '$100M post is the Series A price') makes you pass on outliers like Rippling at $250M, where you'd be missing the founder's excellence, TAM, product sequencing and team.

50:05 20VC: Benchmark's Newest General Partner Ev Randle on Why Margins Matter Less in AI | Why Mega Funds Will Not Produce Good Returns | OpenAI vs Anthropic: What Happens and Who Wins Coding | Investing Lessons from Peter Thiel and Mamoon Hamid

Max Altman · Nov 21, 2025

Entering a seed at a $50-100M valuation only makes sense if you believe the company can exit at $50-200B; a $5B exit no longer makes it a good investment

The entry price mathematically requires an outcome of that magnitude to be a good return

37:54 20VC: Max Altman on The New Seed War: Can Anyone Compete with Sequoia and a16z | Leaving $2BN on the Table with Reddit | Lessons from Backing Rippling at $25M Post | Why Climate Tech is a Mirage and Disaster

Bill Gurley · Dec 6, 2021 · hedged

His own conservative, finance-trained analytical mindset may not be optimized for venture if the current boom persists for another decade

Some of the companies and moves that have worked lie outside that mental model; the world is playing at a different pace, and he keeps asking why he missed things

33:15 A conservative finance trained analytical mindset may underperform if the boom persists

Mike Maples · Jan 6, 2025

Debates about valuation are largely false debates: 'if the company is awesome you can pay any price' is true only to the extent you can still make 100x on the first check, which is the high-order bit

The only test that matters is whether a $1-2M first check can return 100x at the entry price, as with Applied Intuition at $40M post now worth $6B

14:31 Entry price only matters if 100x on first check remains achievable

Harry Stebbings · Jan 6, 2025

The 100x-on-first-check framework is worrying because it bakes in assumptions of half or more dilution, meaning nearly every investment has to become a $5B business

15:28 100x first check framework implausibly requires most investments reach 5b outcomes

Avichal Garg · Apr 11, 2022

Pricing crypto assets and tokens works very similarly to traditional venture: you don't do DCF or NPV on present worth, you underwrite what would have to be true for the asset to reach the multiple you need

Venture is never about what a thing is worth today; as with a Stripe Series A, the founder sets the raise and dilution and the investor only has to judge whether the ownership can compound to the required outcome

41:42 Crypto pricing mirrors venture underwrite to required multiple not dcf or npv

Will Quist · Sep 12, 2022

Price discipline only ever hurts you by making you miss a dramatic winner, and most apparent pricing mistakes are really allocation and portfolio-management mistakes

When an investment wins nobody credits the entry price; the real error is putting $3M into something very risky for 15% ownership while putting $100k into a less risky company at a $150M post

27:30 Price discipline mainly costs you missed winners most pricing mistakes are actually allocation mistakes

Guy Podjarny · May 24, 2023

The best companies have not consistently commanded the highest prices — the correlation between valuation and outcome is only slight

Founders who can articulate the opportunity well tend to sell both to investors and to customers, which creates some correlation, but it is weak

46:39 Valuation only weakly correlates with eventual company quality or outcome

Howie Liu · Aug 25, 2023

What matters most in venture is upside/IRR potential — an early-stage investor can't get excited about a business whose ceiling is $100M revenue if that's already priced in

At a valuation pricing in the plateau, the best case is a 2-3x, which doesn't fit an early-stage returns profile

30:31 Venture requires uncapped upside a business with a 100m revenue ceiling priced in doesnt fit

Logan Bartlett · Aug 29, 2022

Anyone who invested last year lost some degree of price sensitivity, himself included

Underwriting to 3-5x with 10x-plus upside against public comparables trading at 30-50x forces your entry-price tolerance to adjust to whatever the public markets say things are worth

26:40 Price sensitivity shifts with public market benchmarks while the underwriting framework stays fixed

Jason Lemkin · Aug 9, 2023

Within a range, valuation simply doesn't matter — what matters is a fair valuation that lets you hit your ownership target

Complaints about a deal being at 8.4 pre instead of 6.2 are trivial

10:57 Valuation doesnt matter within a range as long as ownership target is met

Harry Stebbings · Aug 9, 2023

For funds of constrained size, valuation differences do matter materially — moving from a $12M to a $25M price doubles the check needed for 10% ownership and halves your diversification

Hitting a 10% ownership target at a higher price forces a bigger check, cutting the number of investments the fund can make

11:23 Price matters more for size constrained funds since it changes required check size

David Tisch · Feb 27, 2023

If a company goes well, the pre-seed and seed rounds are the cheapest entry points an investor will ever get, so entry price should be treated as a fact rather than a pain.

A founder's job is to take the capital and create enough value that each subsequent round is bigger, so the earliest price is always the lowest in a successful outcome.

11:06 Seed is the lowest price will ever be in a successful outcome so treat it as fact not pain

Cyan Banister · Oct 19, 2020

Seed investors must be price sensitive because company outcomes have finite endpoints and very few companies ever reach $10B

If you count how many companies in the last ten years passed $10B it's very few, so entry price and dilution math determine whether you can get venture returns

18:35 Few companies reach massive scale so seed investors must be price sensitive

Chris Paik · May 8, 2023

The common VC observation that their best companies are the ones they own least of or paid the highest price for is a confusion of outputs with inputs — high price and low ownership are not desirable inputs

With a high conviction bar, the highest-conviction investments are naturally the ones you break the most rules on, so the correlation is an artifact; you set rules to know what your exceptions are

12:01 Low ownership high price correlation with best companies is an artifact of exception making

Frank Rotman · Aug 26, 2021

Price discipline has disappeared from the venture market and valuation has collapsed into arithmetic — a founder naming a raise size and a dilution cap is division, not valuation math

It's a founder's market: one great business is chased by many VCs and many dollars, so founders dictate terms and VCs accept that as the price of winning

16:41 Founders market dynamics have eliminated price discipline industry wide

Terrence Rohan · Feb 5, 2024

Releasing yourself from valuation sensitivity entirely and focusing on conviction and finding special companies is the better way to do the job.

Your entry prices will end up sampled across five to fifty based on what you saw, picked and won, so the constraint isn't worth imposing.

24:20 Release valuation sensitivity and focus purely on conviction

Shardul Shah · Sep 16, 2024

When you have conviction in people at the earliest stages you can be very elastic on price, and at late stage price is just a representation of future expected free cash flow

Price is a downstream representation of the underlying business, so pricing error is really judgment error about the company

13:45 Price reflects conviction in people early and future cash flow late

Harry Stebbings · Jul 15, 2024

At 20-40 post for a pre-product, pre-revenue company you are not being paid for the risk you are taking, even though it is also true that being in the massive outcomes is what matters

Both things can be true at once — you make that trade-off knowingly, but the risk is not compensated

26:57 High seed prices are not actually compensated by commensurate risk even if power law logic still holds

Saam Motamedi · Jul 15, 2024

Investors do need a ceiling on the valuations they are willing to pay

Dilution over subsequent rounds means too high an entry price caps the multiple even on a $5B outcome

28:41 Price ceilings are still necessary because dilution caps achievable multiple even on big outcomes

Martin Mignot · Aug 11, 2025

Asking whether you are being paid for the risk you're taking is not a useful frame at the early stage because you cannot know the size of the reward

The industry has consistently underestimated outcome sizes — nobody ten years ago expected today's revenue growth rates and market caps — so with hindsight even high early prices may have been fair

30:48 Reward size is unknowable early so risk adjusted framing fails

Eric Vishria · Sep 25, 2024

Even great companies can be overvalued, so venture investors have to apply public-market fundamentals like eventually trading under 30x free cash flow

Bill Gurley's public-markets analytical mindset shows that valuation ultimately reverts to fundamentals, so an amazing company you believe in can still be too expensive

50:01 Public market fundamentals cap price even for great companies