Does Entry Price Still Matter in Venture?
Sameer Dholakia says entry price always matters, and about 150 times current revenue was still a price he would pay for Anthropic because the company could grow at scale, compound for a very long time, and still make a venture return. Four and a half years into a second career, he treats the work as a craft and looks out the windshield.
The investments he is most proud of sat at current ARR multiples that would make most venture capitalists throw up, and they sparked hard talks in the investment committee. Anthropic, in a 15 billion dollar round, was at about 100 million dollars, like 150 times current ARR. Legora was at 20 million dollars of ARR when he invested and led a 1.8 billion dollar round. A backward look makes the multiple look like bad math. He prices the next 12 months. Year-end next year can stretch toward 18 or 24 months, and he will not pay that far forward. He has been an operator and a CEO, so he knows how hard the forecast is when growth is moving fast. The next 12 months is close enough to judge.
Paying 10 to 15 times revenue over the next 12 months is not crazy for companies growing at rates never seen in business, or in his 31 years. They blow through the multiple. Legora went from 20 to 200 after the 1.8 billion dollar round, and he feels pretty good about the entry.
