BWI Learning Library
VC Readiness Assessment
Is venture capital the right capital for your business?
Your company
VC Readiness Assessment · BWI Network · results for the numbers below
Your result
0.60x
Borderlinefunds returned to a $60m fund
Borderline: returning the fund needs your upside case
Your plan returns 0.60x a $60m fund. It reaches 60% of the revenue needed and could return a fund of up to $35.9m.
The numbers behind it
- Exit needed to return the fund
- $735.3m
- Revenue needed at exit
- $91.9m
- Revenue at exit on your plan
- $55m
- Your plan reaches
- 60%
- Multiple on the investor's check
- 17.9x
- Largest fund this could return
- $35.9m
- Founders' share of the exit
- $161.5m
- Rough cash to fund the plan
- $81.7m
at 8x revenue
growing 91.9% a year
growing 79.9% a year
of the revenue needed
36.7% at exit, before preferences
at a 1.5x burn multiple
Reality checks
A flag is a warning, not a failure. It never changes the verdict.
2 of 4 flagged as a stretch
Growth needed to return the fund (step 7)
StretchYour number 91.9% · threshold 50.0%
Above the threshold, a fund-returner outcome needs exceptional growth every year until exit.
Growth assumed in your own plan (step 9)
StretchYour number 79.9% · threshold 50.0%
Above the threshold, your base case is itself an exceptional outcome. Consider a more conservative plan.
Share of your serviceable market at exit
Within rangeYour number 2.7% · threshold 10.0%
Implied EV/EBITDA at exit
Within rangeYour number 32.0x · threshold 40.0x
The investor’s math, step by stepAll 18 steps, from the fund’s size to your plan.
- Post-money valuationPre-money valuation + round size.$15m
- Investor's ownership todayInvestor's check ÷ post-money valuation.13.3%
- Share of ownership kept after future roundsMultiply (1 − dilution) for every future round.61.2%
- Investor's ownership at exitOwnership today × share kept.8.2%
- Exit value needed to return the fundFund size ÷ ownership at exit. This is the fund-returner exit.$735.3m
- Revenue needed at exitFund-returner exit ÷ exit multiple.$91.9m
- Revenue growth needed every year until exit(Revenue needed ÷ revenue today) ^ (1 ÷ years to exit) − 1.91.9%
- Revenue at exit on your planToday's revenue grown by each year's growth, to year 8.$55m
- Revenue growth per year on your planAverage annual growth from today to exit.79.9%
- Your plan reaches this share of the revenue neededRevenue at exit on your plan ÷ revenue needed (step 6).59.8%
- Exit value on your planRevenue at exit × exit multiple.$439.7m
- Investor's proceeds at that exitExit value × investor's ownership at exit, before preferences.$35.9m
- Funds returned by this one investmentInvestor's proceeds ÷ fund size. 1.0x or more = fund returner.0.60x
- Multiple on the investor's checkInvestor's proceeds ÷ investor's check.17.9x
- Largest fund this outcome could returnEqual to the investor's proceeds: look for funds this size or smaller.$35.9m
- Rough cash burn to reach that revenueNew revenue added × burn multiple. A rough estimate: burn usually falls as you scale.$81.7m
- Founders' ownership at exitFounders' ownership after this round × share kept.36.7%
- Founders' share of the exit valueBefore liquidation preferences, taxes and fees.$161.5m
Ownership at exit assumes the investor does not buy more shares in later rounds. Proceeds ignore liquidation preferences, fees and taxes.
Your plan against what is needed
The dashed line is what returning the $60m fund would take.
| Year | Today | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
|---|---|---|---|---|---|---|---|---|---|
| On your plan | $500k | $1.5m | $3.8m | $7.5m | $13.5m | $21.6m | $31.3m | $42.3m | $55m |
| Needed to return the fund | $500k | $959.4k | $1.8m | $3.5m | $6.8m | $13m | $25m | $47.9m | $91.9m |
| If you sold that year | $4m | $12m | $30m | $60m | $108m | $172.8m | $250.6m | $338.3m | $439.7m |
T2D3 is a widely cited growth path for top-performing software companies from about $1m to $2m of recurring revenue. Shown for five years as a reference only.
What if growth or the exit multiple changed?
The centre cell is your plan. Growth is scaled in every year.
| Growth vs. plan | 4x | 6x | 8x | 10x | 12x |
|---|---|---|---|---|---|
| 60% | 0.07x | 0.10x | 0.13x | 0.17x | 0.20x |
| 80% | 0.15x | 0.22x | 0.29x | 0.37x | 0.44x |
| Your plan | 0.30x | 0.45x | 0.60x | 0.75x | 0.90x |
| 120% | 0.57x | 0.86x | 1.14x | 1.43x | 1.71x |
| 140% | 1.03x | 1.55x | 2.07x | 2.59x | 3.10x |
Green returns the fund (1.0x or more), amber is borderline. A dash means that exit multiple would be zero or below.
Which fund sizes can your plan serve?
Larger funds need larger exits. Target funds your outcome can return.
| Fund size | Exit needed | Revenue needed | Growth per year | Your plan returns it? |
|---|---|---|---|---|
| $10m | $122.5m | $15.3m | 53.4% | Yes |
| $25m | $306.4m | $38.3m | 72.0% | Yes |
| $50m | $612.7m | $76.6m | 87.6% | No |
| $100m | $1.2bn | $153.2m | 104.5% | No |
| $250m | $3.1bn | $383m | 129.4% | No |
| $500m | $6.1bn | $765.9m | 150.1% | No |
Uses the same ownership at exit for every fund size. Larger funds usually write larger checks for more ownership, which lowers the exit they need.
Which kinds of capital suit your numbers?
Directional only: every funder applies its own criteria.
Venture capital (fund size entered)
Possible fitYour plan returns 0.60x a $60m fund; the threshold for venture-scale is 1.0x.
What it usually looks for
A credible path to a very large exit, a big market, fast growth, and a team that can build a category leader. Expects to own a meaningful share and to exit within about 10 years.
Smaller venture funds and emerging managers
Possible fitThis outcome could return a fund of up to $35.9m. Tested against a $20m fund.
What it usually looks for
The same venture logic at a smaller scale. A smaller fund needs a smaller exit to return itself, so solid but not huge outcomes can still work.
Angel investors
Possible fitAt your plan, an investor on these terms makes 17.9x their money; angels often hope for 10x or more.
What it usually looks for
Belief in the founders and a strong return on their own check. Angels have no fund to return, so they can back outcomes that funds cannot.
Revenue-based financing
Possible fitRevenue of $500k vs. $250k minimum; gross margin 75% vs. 50%.
What it usually looks for
Steady, predictable revenue and healthy gross margins. Repaid as a share of monthly revenue. No equity given up, but repayments start right away.
Bank or government-backed loan
Poor fitCurrent EBITDA margin is -60%. Lenders generally need profits or reliable cash flow to cover repayments.
What it usually looks for
Profits or cash flow that cover interest and repayments, a trading history, and often collateral or a personal guarantee. Government-backed programs can relax some requirements.
Bootstrapping and customer funding
Poor fitCurrent EBITDA margin is -60%. Losses are large today: bootstrapping would mean cutting costs or slowing growth sharply.
What it usually looks for
Revenue that funds growth: annual prepayments, deposits, pre-sales or service revenue. You keep full ownership and control, and grow at the pace cash allows.
Grants, competitions and programs
Check eligibilityDepends on your sector, location, founder background and mission rather than the numbers in this tool.
What it usually looks for
Fit with the funder's mission and eligibility rules. Non-dilutive, but often slow and competitive, with reporting requirements.
Many companies combine sources: for example angels and a grant first, then venture capital once the growth path is proven, or revenue-based financing instead of a round.
Venture debt is usually available only to companies that have already raised venture capital.
The numbers you entered
- Company
- Your company
- Current annual revenue
- $500,000
- Gross margin
- 75%
- Current EBITDA margin
- -60%
- Burn multiple
- 1.5x
- Serviceable market
- $2,000,000,000
- Years until exit
- 8
- Growth plan
- 200%, 150%, 100%, 80%, 60%, 45%, 35%, 30%
- Exit multiple
- 8x
- EBITDA margin at exit
- 25%
- Round size
- $3,000,000
- Pre-money valuation
- $12,000,000
- This investor's check
- $2,000,000
- Investor's fund size
- $60,000,000
- Founders' ownership after the round
- 60%
- Future dilution
- 20%, 15%, 10%, 0%, 0%, 0%
Thresholds used: venture-scale at 1.00x, borderline at 0.50x, exceptional growth above 50% a year, market share above 10%, and EV/EBITDA above 40x. Smaller funds are tested against $20.0m.