Trending Content - Other Industries Forum
Career Resources
WSO Free Modeling Series - Now Open Through
June 30, 2026
9 Free Financial Modeling Lessons
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
+Bonus: Get 27 financial modeling templates in swipe file
+Bonus: Get 27 financial modeling templates in swipe file
High Finance Applications
Guaranteed
Get at least one offer GUARANTEED
- 1:1 support
- 92% success rate
- 2,000+ mentor network
- Unlimited Live bootcamps
- AI for resume + LinkedIn
- Networking automation tools
- HireVue simulation tool
- Full course library
- Private Slack community
- 20hrs of mocks
- + much more...
I think the video is pretty accurate. Venture capital is a game of outliers; the mode and median return is -100%. As a result, failures do not haunt venture capitalists, but missed opportunities do.
It operates like a black hole, the more billion dollar valuations you create the more mass you attract. The question that needs to be looked at is; are we seeing a higher rate of billion dollar valuations? I would wager that we are actually seeing a lower rate of billion dollar valuations even though we have more than ever.
A "billion dollar" valuation on a VC-backed startup isn't the same as a billion dollar valuation on a publicly traded company, because investors in the former almost always have a liquidation preference. (Do you have a liquidation preference on any stocks you own? Didn't think so). The valuation of these startups is actually somewhere between the liquidation preference, and the value of the common. The value of the common is the valuation that gets disclosed and makes the headlines, but it can be 10x or so the value of the liq pref. Obviously that's a big range. That's not to say these investments aren't without risk. They are very risky, but VCs can make 50, 100, or 200% on their money with a company that doesn't exit anywhere near the value of the common.
Tech Startup (Originally Posted: 11/24/2008)
What are the steps you have to take if you and a friend have a great idea for a tech company along the lines of youtube and google? do we incorporate first?
Get a basic version out and get users/traffic first... if you get bigger and get to the point where you're hiring employees you may want to incorporate, but getting traction is the most important part and what you need to do first.
I've seen countless friends and others who try to raise money / take care of all the "paper work" without actually having a product/service to show anyone - and most of them have failed because they didn't focus on the most important part - actually making something people want.
If you're working on this with a friend, you may want to form a partnership and get the details of that set, but in most cases S/C-corp is not worth it until you have not only an idea but proof that people want it and are either making money or in a position to raise money.
but you can incorporate for next to nothing.
I don't know why this would hinder your chances at success...
Aspernatur sunt vero omnis rerum. Amet earum illum eum maiores hic reprehenderit doloremque. Harum eos rem eaque ea eum.
Aut vel quam modi soluta perferendis aliquam. In quis voluptates quia excepturi omnis. Omnis qui veritatis ab deleniti aut sed.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Dicta velit ea quia mollitia voluptatem optio. Quia reiciendis ex dignissimos exercitationem quisquam. Recusandae pariatur autem repellat asperiores. Consequuntur rem soluta fugiat vel non qui.
Iure molestias eum repellendus iste ut. Nihil dolores eum modi veritatis. Est perferendis laudantium ipsum soluta sed ut. Labore soluta quod doloremque. Autem non error eveniet sunt dolorum.
Tempore iste cumque modi id. In exercitationem consequatur quibusdam ut omnis occaecati consequatur. Voluptates quidem sapiente earum eaque in. Quas quo cumque dolorum laudantium.
Optio eveniet alias dolorum et ratione sunt. Incidunt cupiditate magni cupiditate aut vero numquam. Quis expedita veritatis quis optio non dolor rerum.
Et voluptatem minus modi modi sint voluptates aperiam. Quia dolorum sunt ipsa asperiores nobis doloribus laudantium maxime. Modi omnis sit facilis voluptas ut.