Einar Vollset

And that's sort of the ground thinking on the investing side for TinySeed is like, how do we make that happen? And really what that boils down to is a couple of different things. Like one is I don't think it works for every single industry, every kind of product, every kind of service. Like there's just some things that are just requires a lot of capital, is extremely capital intensive.

And that's sort of the ground thinking on the investing side for TinySeed is like, how do we make that happen? And really what that boils down to is a couple of different things. Like one is I don't think it works for every single industry, every kind of product, every kind of service. Like there's just some things that are just requires a lot of capital, is extremely capital intensive.

You know, like it makes total sense to keep raising money. And like if you keep raising money and burning money, then like the sort of winner take all stuff makes total sense here. Like your Airbnbs, your hell, you like your new open AI stuff, right? Like it makes total sense. I'm going to raise money.

You know, like it makes total sense to keep raising money. And like if you keep raising money and burning money, then like the sort of winner take all stuff makes total sense here. Like your Airbnbs, your hell, you like your new open AI stuff, right? Like it makes total sense. I'm going to raise money.

gazillion a trillion dollars and it is whatever and even some of the smaller stuff is like look my standard thing is like look if you're going to do like a home grooming startup service type thing that it's got it's got to be capital intensive like it's like an uber you you got to spend money on it and like you're going to get diluted you know up the wazoo and you have to gun for an enormous outfit to make any money but like what we realized is like okay but there is this subset of specifically b2b sass where like it can work because for a

gazillion a trillion dollars and it is whatever and even some of the smaller stuff is like look my standard thing is like look if you're going to do like a home grooming startup service type thing that it's got it's got to be capital intensive like it's like an uber you you got to spend money on it and like you're going to get diluted you know up the wazoo and you have to gun for an enormous outfit to make any money but like what we realized is like okay but there is this subset of specifically b2b sass where like it can work because for a

Yeah, a lot of the time. Because like the gross margins are like, you know, 95%. That's not unusual. And quite often on the discretion side, I talk to founders and they're like, yeah, do you think I'm profitable enough? I got 65% free cash flow.

Yeah, a lot of the time. Because like the gross margins are like, you know, 95%. That's not unusual. And quite often on the discretion side, I talk to founders and they're like, yeah, do you think I'm profitable enough? I got 65% free cash flow.

Yeah, like expanding revenue. And it's like, it's crazy. I mean, like you even see this in some of the like go public companies like Zoom. And I think Zoom actually is the sort of poster boy for this. You know, the Zoom, I think they went public with more money in the bank than they raised.

Yeah, like expanding revenue. And it's like, it's crazy. I mean, like you even see this in some of the like go public companies like Zoom. And I think Zoom actually is the sort of poster boy for this. You know, the Zoom, I think they went public with more money in the bank than they raised.

Yeah. And that's sort of like what B2B SaaS is like. And so I think it works for that. And in a sense that like there is this notion that it basically, like if you take a little bit of money once and then you don't need to raise anymore. You can if you want to, but you don't need to. And so that's what works for tiny seed or mostly bootstrap or tiny seed like companies.

Yeah. And that's sort of like what B2B SaaS is like. And so I think it works for that. And in a sense that like there is this notion that it basically, like if you take a little bit of money once and then you don't need to raise anymore. You can if you want to, but you don't need to. And so that's what works for tiny seed or mostly bootstrap or tiny seed like companies.

And like if you combine that then with what we consider to be reasonable valuation. So So I think, like, if you're playing the classic VC game, $20 billion a bus, yeah, you're right. It doesn't matter that you're paying $25 million for a pre-revenue product at YC Demo Day as a seed investor. It's fine. Like, who cares?

And like if you combine that then with what we consider to be reasonable valuation. So So I think, like, if you're playing the classic VC game, $20 billion a bus, yeah, you're right. It doesn't matter that you're paying $25 million for a pre-revenue product at YC Demo Day as a seed investor. It's fine. Like, who cares?

Like, if you could invest at $25 million valuation into OpenAI or Airbnb, then great investment. Go do it. But... 25 million, say, and then it goes to a billion dollars. Let's just say that rather than 20. Let's be a little less ambitious than Mr. Altman was. That's a 40x return on your money. That's a good return. That's a great return.

Like, if you could invest at $25 million valuation into OpenAI or Airbnb, then great investment. Go do it. But... 25 million, say, and then it goes to a billion dollars. Let's just say that rather than 20. Let's be a little less ambitious than Mr. Altman was. That's a 40x return on your money. That's a good return. That's a great return.

Sadly, and we can get in the math here, it might not be good enough for an investor, like a fund investor. But the flip side of that is like a billion dollars is still a billion dollars. It's still kind of an unusual outcome. And I'm not saying like valuation here. I'm saying like actually cash, like IPO or selling or whatever, like not just make-believe valuations. actual money in the bank.

Sadly, and we can get in the math here, it might not be good enough for an investor, like a fund investor. But the flip side of that is like a billion dollars is still a billion dollars. It's still kind of an unusual outcome. And I'm not saying like valuation here. I'm saying like actually cash, like IPO or selling or whatever, like not just make-believe valuations. actual money in the bank.

And I think that's pretty rare, right? And the fact of the matter is, if you come in the kind of valuations that we do at, and it's capital efficient enough that these companies aren't raising money all the time. So say if we come in at a couple of million, 1.8, I think is our average, and then you 40X that, that's 72 million.

And I think that's pretty rare, right? And the fact of the matter is, if you come in the kind of valuations that we do at, and it's capital efficient enough that these companies aren't raising money all the time. So say if we come in at a couple of million, 1.8, I think is our average, and then you 40X that, that's 72 million.