Jason M. Lemkin argues VCs now chase a Rule of 100, not Rule of 40. They want rapid growth while burning less than bookings. Mediocre growth paired with profitability no longer cuts it.
Magic number rather than just growth in 2023. So can you share. Yeah. Can you share some of this example where a company used to grow at all cost, but then they kind of change the way they operate and they be able to optimize their rule of 40 or magic numbers either?
I don't think any of that stuff's true.
Yeah.
Again, I think this is where Twitter does founders a disservice. I don't think VCs care about the rule of 40 per se. I don't think they can. What VCs want today and they did not want in 2021 is they want very strong growth that's capital efficient. They want companies at a minimum burning less than their booking. Not. I know we talked about bookings, but if you're going to go from 40 to 80 this year and add 40, they want you to be burning 20. Right. And. And it's not really so much the rule of rule of 40 like it makes sense, but those metrics are really for public and very mature companies. Right. They're still true. But Rule of 40 kind of implies that mediocre growth is okay if you're profitable. And that's the disservice. It's. No VC is interested in mediocre growth that's profitable. Like, we started this early day. No one's interested in the rule of 30. We really. VCs want rule of 100.
Okay, that's true.
And.
