Bill Gurley

And everyone loved to say, oh, it's not IRR, it's DPI.

But if time doubles, it is IRR.

That's what really matters.

And in addition to that time, the cost of capital, you have dilution.

So every one of these zombie unicorns is diluting

three, four, five, 6% a year on equity issuance to the employee base.

And when you combine those two, it's a real problem.

Let's say you were expecting to get $100 back from an investment in year 10, and you want to delay it to year 15.

If you just take that 10% compounding, it now needs to be worth $160 in year 15.

If you make the argument that

these people invested in venture to get a big return, then your cost of capital is not five.

That's the risk-free rate.

It's 15.

And then it's 20% a year, 15 plus the five from the equity dilution.

And now if you wait five more years, guess how much money you need instead of $100?

$250.

for a five-year delay, just to meet the same return expectation people had of the asset class.

So that's a real problem.

It's also not clear to me, I think there were a certain number of companies that were either acquired or went public in a stage, and then Entropy exists, all companies,

have trouble growing over the very long term.