Seed round
Two founders, no revenue, a hot round
A climate-hardware seed is raising $6m at $30m post. The team is exceptional, the market is unproven, and another fund has offered to pre-empt at $40m tomorrow.
All simulators
Ownership, reserves and power-law outcomes
Venture Capital simulator
Your seat: Investment team, early-stage fund
Most of what you fund will fail. That's expected. The job is owning enough of the few that work, and backing them again once the evidence shows up.
What you'll learn
- Why ownership at entry and reserve discipline decide fund returns
- How paper markups borrow credibility from an exit you do not control
- What structure in a down round does to the people who create the outcome
Who it's for
Anyone targeting venture capital, growth equity or startup finance.
It works as interview prep: you'll have made the calls an interviewer asks about, and seen what happens when you get them wrong.
Decisions from your first year
Three calls a year. Here's the kind of thing that lands on your desk before your first promotion.
Follow-on
Reserve the follow-on or spray the seeds
You have $40m of undeployed capital. You can seed twelve more companies or hold reserves to defend ownership in the four that are working.
Governance
The founder you backed is not the CEO you need
Your best portfolio company has tripled revenue and lost three executives in six months. The board wants an outside CEO; the founder threatens to leave.
The ladder
Each rank has its own bar for returns and standing. Clear both to move up.
- Analyst
- Associate
- Principal
- Partner
- General Partner
- Managing Partner
Terms you'll use
- Dry powder
- Committed capital not yet deployed.
- Multiple of money
- Total cash out divided by cash in.
- IRR
- The annualised rate of return, weighted by timing.
- Carried interest
- The manager's share of profits above a hurdle.