52. Are there startups that are successful but don’t get all the press? No, you can’t. Because the semi-sad thing for VCs is, only Unicorns make the business model work: • Say you have a $200m VC fund (not that large, but basically our current fund, as an example). • Your own investors (the LPs) are looking for gross returns (before expenses) of about 4x, so let’s call it $800m. • You get to make about 30 or so investments from that fund. So those 30 investments have to return $800m. How can they do that, if you own on average say 15% of each company? Well $800m / 15% = $5,333 billion So you need $5.333 billion in exits (measured by the companies’ value at time of exit) to hit your own investors’ expectations in “just” a $200m VC fund. Multiple unicorns, in fact. And now you can see why VCs care so much about how much they own. Scale that up for billion+ funds. Unicorn Hunters, so all VCs must be. SAASTR.COM 47