Jason M. Lemkin argues that merging with a competitor can create the critical mass needed for a large exit when selling at high multiples becomes difficult after raising significant capital. This path to a $500 million outcome is rarely discussed by VCs or on social media.
But when you raised massive amounts of money early, how are you going to sell for 10x what you raised? Who's going to buy you for 500 million? I think that they. The answer, the best answer may be to combine with a competitor, right, and build some sort of critical mass with your combined revenue and capital stream. But I think it's sad. They're really, really rare. VCs don't talk this way. And Twitter doesn't talk this way. They're very rare.
