View from Seed

AUGUST 17, 2021

One industry specific example is the strange fascination among some LPs and GPs around term IRR. Even though everyone knows that VC funds take 10+ years to come to fruition, one often can’t help but benchmark themselves based on IRR in the early days. But then again, this is what skeptics have been predicting for 10+ years.

IRR 205

IRR Dilution Founder Portfolio 205

View from Seed

AUGUST 17, 2021

One industry specific example is the strange fascination among some LPs and GPs around term IRR. Even though everyone knows that VC funds take 10+ years to come to fruition, one often can’t help but benchmark themselves based on IRR in the early days. But then again, this is what skeptics have been predicting for 10+ years.

IRR 156

IRR Dilution Founder Portfolio 156

View from Seed

AUGUST 17, 2021

One industry specific example is the strange fascination among some LPs and GPs around term IRR. Even though everyone knows that VC funds take 10+ years to come to fruition, one often can’t help but benchmark themselves based on IRR in the early days. But then again, this is what skeptics have been predicting for 10+ years.

IRR 136

IRR Dilution Founder Portfolio 136

David Teten

JANUARY 19, 2021

That said, nothing is cost-free. More complex cost of capital calculation. This causes the cost of capital for Flexible VC, often calculated through IRR (similar to an interest rate), can be higher than that of venture debt or traditional RBI. Typical business stage. Typical business model.

Cofounder 78

Cofounder Technical Review Equity Dividend 78

Steve Blank

MARCH 31, 2014

Unfortunately as we’ve learned from recent experience, using Return on Net Assets and IRR as proxies for efficiency and execution won’t save a company when their industry encounters creative disruption. The first will be commodity businesses that are valued for their ability to execute their current business model.

Private Equity 325

Private Equity Metrics China Intellectual Property 325

Steve Blank

MARCH 4, 2014

These groups are adapting or adopting the practices of startups and accelerators – disruption and innovation rather than direct competition, customer development versus more product features, agility and speed versus lowest cost. Every large company, whether it can articulate it or not, is executing a proven business model (s).

IRR 335

IRR Startup Business Model Agile 335

Steve Blank

JUNE 23, 2016

As a consequence, corporations used metrics like return on net assets (RONA), return on capital deployed, and internal rate of return (IRR) to measure efficiency. These resulting business models made them look incredibly profitable. They knew how to execute the current business model. But it’s not over for Intel.

Architecture 227

Architecture IRR Balance Sheet Liquidity Event 227