Gurley calculates five-year delay requires $160 return versus $100 due to 15% cost plus 5% dilution.
“That's the risk free rate. It's 15. And then it's 20% a year. 15 plus the five from the equity dilution.”
Gurley calculates five-year delay from year ten to fifteen requires $160 instead of $100 just from compounding cost.
“Let's say you were expecting to get a $100 back from investment in year ten and you wanna delay it to year fifteen.”
Gurley calculates that delaying exits from year ten to fifteen requires 2.5x higher returns to meet expectations.
“If you just take that 10% compounding, it now needs to be worth a $160 in year fifteen.”