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The magic number!

June 14, 2006

Venture Capital Post on the Texas Startup Blog!

For years my YEO forum has talked about ‘how much is enough’ in the sense of how much money is enough. Yesterday Brian and I were at Jeff The image “http://guide.theemiratesnetwork.com/living/images/soccer%20ball%202.jpgâ€? cannot be displayed, because it contains errors.Clavier’s (our favorite VC these days) house watching World Cup soccer (or football as Jeff might call it) - France played Switzerland. Jeff wasn’t pleased that the game was so boring, but it did give us a chance to talk about business. The topic of what is the magic number for a founder to sell versus raise capital came up.

Founders with interesting web properties often have a choice to either sell or raise outside capital. Jeff described what I call the ‘magic number’ where founders will sell versus raise capital. He believes $10MM is today’s magic number. In the bad old days I was offered (not in writing) $10MM for my equity in LayerOne and I scoffed at the offer. By 2001 I would have jumped at $1MM, much less ten. Today my number is a little higher.

France ended up tying Switzerland in the end - Jeff was not pleased.

Written by Alexander Muse · Filed Under Blog 

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  1. Jeff Clavier Says:
    June 15th, 2006 at 12:29 am

    Just one important clarification: that magic number really applies to “first timer’s”, i.e entrepreneurs that would make it big for the first time.

    Good to see you and Brian :-).

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