21/10/2024
You're the CEO of a promising startup, fresh off a Series B.
Things are looking goodโbut what happens next?
As you push for a Series C or even a D, the road narrows.
Fewer investors, fewer acquirers.
And raising the next round?
Itโs not enough just to growโyou need to convince institutional investors youโre worth billions.
But how?
Hereโs the harsh truth:
To let your VCs shine, you need to provide them with a 10x to 100x exit. That means, with a $500M valuation, your company needs to hit somewhere between $5 billion and $500 billion in value.
Think about itโhow many companies can buy you out at that level? Not many.
But the public market can.
Thatโs where the big institutional playersโpeople with a mindset like Charlie Mungerโwait for opportunities.
And they are not looking for flashy startups; they want solid, long-term investment cases.
So, how do you make your company attractive to these investors?
It starts with understanding their mindsetโjust like Charlie Mungerโs principles that guide the best in business and investing.
Step 1: ๐๐๐ฌ๐ญ๐๐ซ ๐ญ๐ก๐ ๐๐ซ๐ญ ๐จ๐ ๐๐ง๐ฏ๐๐ซ๐ฌ๐ข๐จ๐ง ๐๐ก๐ข๐ง๐ค๐ข๐ง๐
Munger teaches us to think backwardโidentify what could go wrong and work backward to avoid those pitfalls. As a CEO, this means understanding what makes institutional investors walk away and structuring your company to avoid these red flags.
Step 2: ๐๐จ๐ฆ๐ฉ๐จ๐ฎ๐ง๐ ๐ญ๐ก๐ ๐๐ข๐ ๐ก๐ญ ๐๐จ๐ฏ๐๐ฌ
Just like compound interest builds wealth, small, consistent improvements in your companyโs governance, culture, and financial health make you more attractive over time. The institutional investors youโre targeting are not impressed by fast growthโtheyโre looking for consistent, sustainable improvement.
Step 3: ๐๐๐ญ ๐ญ๐ก๐ ๐๐ง๐๐๐ง๐ญ๐ข๐ฏ๐๐ฌ ๐๐ข๐ ๐ก๐ญ
What motivates your team today wonโt cut it tomorrow. If you want to scale to a $5B+ valuation, you need to align your company's goals with those of public market investorsโunderstanding the incentives that drive them.
When you apply these principlesโavoiding cognitive biases, fostering the right culture, and aligning with investor expectationsโyouโre not just building a company; youโre building a long-term, investment-worthy powerhouse.
The kind of business that goes beyond a Series C and becomes a public market darling.
The reward?
You stop worrying about the next round and start preparing for an IPOโor, better yet, an acquisition exit that makes your VCs rave about you for decades. But it all starts with adopting the right mindset.
If you want to learn more about how to apply these timeless principles to your business, tune in to my latest podcast episode.
In this episode, I break down the 9 core principles from Poor Charlieโs Almanack that every CEO needs to know, especially when navigating the tricky waters of Series C and beyond.
Your success might depend on it!
๐ Ready to dive deep into Charlie Mungerโs wisdom and transform how you think about business and investing?
Here are the links you need:
๐ง Listen to the full podcast episode here: [https://www.buzzsprout.com/779930/episodes/15964204]
๐บ Watch it on YouTube: [https://youtu.be/grVZJiHqSqg]
๐ Grab the book "Poor Charlieโs Almanack" on Amazon: [https://amzn.to/4hcJHMa]
Donโt miss out!
