At startup events, founders come up to tell me about the companies they're building. Somewhere between the demo and the question about fundraising, I like to ask how much revenue they think the company could be making five years from now, if things go well.
Most have a number in mind. Then I ask what would have to happen for them to make ten times that. And a hundred times that.
Some founders light up. They take the conversation somewhere I hadn't considered, and I learn what they've been paying attention to. Others freeze. Sometimes it's clearly the first time they've thought about it, even though they've already decided to raise venture capital.
That gap is what interests me. What led them to decide VC was the right fit in the first place?
I think some of the confusion comes from us. VCs tell founders to focus. Pick one customer segment, solve one problem, start in one market. Then we sit across from them and ask how this becomes a unicorn, or a decacorn. I can see how that sounds contradictory. But the two questions belong together. Where will you start, and if you get that first part right, what does it give you the chance to build?
So the 100× question is really two questions. How big could this get, and where would the growth come from? And if it could get that big, what would venture capital actually change? The first is the one I'll ask you. The second is the one I'd most like you to ask yourself.
How big could this actually get?
A profitable company doing a few million dollars a year can give its founders financial independence and the freedom to run it for decades. That's a great outcome. It's just not a venture outcome.
Venture capital works on a different arithmetic. A handful of investments usually generate most of a fund's returns, so a VC has to care how large a company could eventually become, what stake the fund could own, and what that stake might be worth at exit. A result that's meaningful to a small seed fund can barely register for a much larger one. None of this is a judgment on the business. It's a constraint on the investor.
So when I ask the 100× question, I'm not asking you to add two zeros to a forecast. I'm asking where the growth would come from. How much could you earn serving the customers you already understand? Could you eventually do more for each of them? Which parts of what you've built would carry over into the next market, and which would you have to build again from scratch?
A modest five-year forecast can sit alongside a very ambitious vision. I'd like to hear both.
What would venture capital actually change?
This is the question I'd most like founders to ask themselves before they approach a VC. If customers are starting to pay and the business could grow on its own revenue, what opportunity would you miss by growing that way? Why does speed matter in your particular market? And if you do need outside capital, what will it let you prove?
Eighteen months of runway tells me how long the money will last. I'm more interested in what you expect to know, or be able to do, in month eighteen that you can't today. That answer does more than make the pitch better. It tells you how much to raise, when to raise it, and whose money makes sense for the company you're trying to build.
In markets where exits are fewer and further apart, this question matters even more. Capital that's priced for a venture outcome is expensive if the venture outcome isn't really on the table. Some of the best companies I've seen in this region would have been worse off with it.
None of this is the whole conversation. Once I believe the outcome could be large and that capital would change the path to it, the rest of the diligence looks like anyone's: what you've learned from the customers you already have, how the next hundred will find you and what they'll cost to serve, and what you understand about this market that took you a long time to learn and gets harder to copy as you grow. Each of those deserves a post of its own. But they come after the size question, not instead of it. A founder who can answer the first two usually finds the rest easier to work through. A founder who can't will struggle with everything that follows, because the whole case for raising rests on them.
I don't expect someone who approaches me at an event to have all of this figured out. And I'd much rather hear a founder defend a modest forecast than invent a billion-dollar one for my benefit.
But if you've already decided you want venture capital, I'd love to hear the thinking that got you there. What have you seen in your first customers that makes you believe this could become much bigger? And what are you doing next to find out?
