I was going to ignore this article as just another piece of nonsense in the same vein, but then it occurred to me that because it's in the NYT, startup founders might actually try to base decisions on it.
So founders and would-be founders, beware. This article is full of mistakes. In particular this one:
most venture capitalists... are not interested in
building viable long-term businesses
If you do the math of VC returns, they are dominated by the big successes-- the companies that go public. Those generate much higher returns than the ones that get acquired, and you can't go public without revenues in at least the tens of millions.
His list of startups that got acquired before they had significant revenues refutes rather than supports his point. It's a short list, and even so, many of the startups on it generated only modest returns for VCs.
YC knows as well as anyone what VCs want, and any founder we've funded can tell you that we tell startups the best thing they can have on Demo Day is a hyperlinear revenue graph.
Everything else makes sense but you lost me here. Even googling the term brings me back to this page.
I assume you mean a revenue curve that 'goes up and to the right' (since that appears to be the simplest explanation) but if it means something else, or something more specific, please do clarify.
Simplest explanation is "hyper"=above/beyond and "linear"=straight line. So the revenue should do better than a straight up-and-to-the-right line, i.e. curve up. He could have just said "exponential" except some HNers would pick nits about whether that was the only acceptable curve.
So founders and would-be founders, beware. This article is full of mistakes. In particular this one:
If you do the math of VC returns, they are dominated by the big successes-- the companies that go public. Those generate much higher returns than the ones that get acquired, and you can't go public without revenues in at least the tens of millions.His list of startups that got acquired before they had significant revenues refutes rather than supports his point. It's a short list, and even so, many of the startups on it generated only modest returns for VCs.
YC knows as well as anyone what VCs want, and any founder we've funded can tell you that we tell startups the best thing they can have on Demo Day is a hyperlinear revenue graph.