Einar Volsett

Six months ago, you can't go, or you can, but you're not going to be successful.

You can't come and say, my goal is to build a software business that will do

Like Nathan's, like 20 million ARR, you know, you know, throwing off cash, presumably doing reasonably well.

Like that's my goal.

Like 20, 30, 40, 50 million ARR.

No seed investor will, traditional seed investor will give you any money because their model doesn't work with that.

Is that they take, um, uh, a structure like a safe in particular, like an unkept safe.

And then what they do is usually they have a pitch deck that they believe in.

And then they look at it and go, yeah, no investor is going to give me money there.

So I'm going to put a couple of slides at the end that has like a hockey stick and

that's right this is how we take over the world that's right and so what happens if they're successful is in the extreme case of say the investor just writes a uncapped safe they are successful to the point where like they're making say 20 million dollars a year and then you know come to us and decide we want to sell it and we were able to sell them for say 5x revenue so now they have 100 million dollar exit but they never needed any more money than the original safe now where does the investor end up on that side of things

they get their money back.

So if they put $250,000 in, when the company sells for 100 million, they get $250,000 back.

So they've negative IRR effectively.

Now, what will that investor do?

Do you think they'll be like, oh, this is a great idea.

I'm going to keep doing exactly what I did because I'm having such great success.

No, what happens is they either decide, well, I'm definitely not putting money into this.

I'm going to put money into real estate instead.

Or they decide like, oh, this is why they say you should only go after companies that are potentially much bigger.