WSJ Venture Capital Dispatch has an interesting article on how long it takes to build large (defined there as time to get to $50M revenue) software companies. The answer: 8-9 years on an average if the sample is top 100 public software companies. Thats pretty long, given that the sample is really the top end. Clearly has interesting implications on how well (or not) the venture model of 5-6 years of holding period applies to software companies.
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Heck!! That gives Alok one more reason not to do idea/plan stage deals… 😉 and wait out 3-4 years for idea stage companies..
Agree with Ajay 🙂
5-6 years time line is still fine as rarely would you see a so called VC getting into a company in year 1!
Shouldn’t matter to VCs, because most VC exits in US are M&A anyway. So companies who may doing sub-$50M in Y5-6 would still be saleable.