A little frustrated by the ambiguity of the $100M in the post. Is that capital raised, ARR, GMV? Makes a big difference in terms of understanding what kind of business they built.
I'd guess it's valuation. He raised once at $1M (F&F probably). Then raised. Then some time post-raise low 7-figs in revenue => $3-4M, and $10M in the bank. Raised $20M at $100M perhaps? Seems reasonable, 25x-30x revenue.
It makes sense. If he got there quick, his product was working, and it had a chance at gold. Ultimately, lots of ways for startup to fail and failing-to-scale is one of them.
Well, he knows there's PMF at a small market now. He can try again without the large raise if he wants to run a lifestyle business.
It must be valuation (if there's a SaaS company that's ever gone from $0 -> $100MM ARR -> $0 within five years I would be very surprised).
But that makes this whole thing pretty circular—they only would have $100MM valuation because they sold a story of growth to investors. Assuming that the round at $100M valuation was during the boom times of 2019-2021, that could have been with as little as $3-5M annual revenue (20-25x multiplier).
Assuming slow or no growth, a company with $3M in revenue would be worth <$15M.
In that reddit post, he says "I had over $10m in the bank for a startup of 5 people making low 7 figures from well established and extremely happy customers."
You are right: low 7 figures = $3-$5M annual revenue
It makes sense. If he got there quick, his product was working, and it had a chance at gold. Ultimately, lots of ways for startup to fail and failing-to-scale is one of them.
Well, he knows there's PMF at a small market now. He can try again without the large raise if he wants to run a lifestyle business.