In today’s ever-changing tech funding world, defining a true “win” isn’t as simple as it used to be. During a recent State of the Industry webinar hosted by York IE, a group of seasoned investors dug into what success actually looks like for both entrepreneurs and the people backing them.
Founders vs. Investors: Different Definitions of Success
John Murphy from Hyperplane pointed out that wins often look very different depending on your perspective. “A win is obviously very different for an investor and an entrepreneur,” he said. For example, if a founder raises $5 million at a $50 million valuation cap and sells the company for $30 million, that might feel like a solid outcome for the founder. But for the investor, that’s likely a disappointing return.
Murphy explained that firms like Hyperplane are looking for big outcomes because just one breakout success can be the difference between a 3x fund and a 5x or 6x return. “Every company we look at, we have to see the possibility of it being a multibillion-dollar public company someday,” he said.
That said, he also stressed the importance of having “off-ramps.” Knowing when and how a company could land safely before market conditions shift is a huge value add. It creates more flexibility for both founders and investors.
York IE’s Joe Raczka agreed, calling “optionality” the key word. He added that just because a deal lands on the front page of TechCrunch doesn’t mean it was the best outcome for the founders, employees, or even the early investors.
Wins Look Different at Every Stage
Deepak Sindwani from Wavecrest Growth Partners, who invests at later stages, shared how his firm defines success. “We underwrite everything 3 to 5x… a win is a business that I think can double or triple or quadruple from when we invest,” he said.
For Wavecrest, that usually means looking for companies with the potential to hit $20 million or more in ARR, strong customer retention, and long-term staying power. According to Sindwani, exits in the $75 to $200 million range can be very solid wins at that stage. He also acknowledged that earlier-stage investors like York IE, Hyperplane, and Launchpad need higher multiples because they take on more risk.
Christopher Mirabile from Launchpad Venture Group added that for seed investors, the range of acceptable exits has grown. He highlighted how growth equity firms like Wavecrest can actually provide valuable liquidity options for early investors while still helping the company scale. That way, those early backers might take some money off the table but still stay involved for future upside.
The Takeaway
In the end, there’s no one-size-fits-all definition of success. What counts as a win depends on the stage of investment, the company’s capital structure, and the goals of the people involved. But one thing is clear: having flexibility and optionality is more important than ever in today’s uncertain market.
