AIM $100M ARR or Don’t Bother! Fundraising Truths for startups. With Jeffrey Paine
- Erdinc Ekinci
- Oct 8
- 5 min read
Raising capital might be every founder’s dream — but as Jeffrey Paine, Co-founder and Managing Partner at Golden Gate Ventures, puts it: “Not every startup should raise venture money — and not every investor matters.”
I had chance to host AMA with VCs event with Jeffrey Paine where he pulled back the curtain on how venture capital really works — from fund math to founder expectations. His honesty offered a refreshing contrast to the hype that often surrounds the startup world.
Watch the full video here-
Here are seven key takeaways from his conversation — blunt, practical, and deeply valuable for founders navigating early-stage growth.
1. Not Every Startup Needs To Be a Unicorn
Startups often chase billion-dollar valuations without asking whether that goal actually fits their market or mission. Paine began by dismantling this global obsession:
“If your company solves a local problem, you don’t need to play the global unicorn game. Play the game that fits your market.”
He explained that the “unicorn mindset” can distract founders from solving meaningful, real-world problems. In regions like Southeast Asia or Japan, many high-impact startups thrive within niche or local ecosystems — focusing on cultural needs, regional logistics, or community-scale innovation.
Paine’s advice is to build a company that wins in its own arena. A business serving a $50M market with strong profitability may be more sustainable — and ultimately more rewarding — than a global company that burns capital chasing growth that doesn’t exist.
Key takeaway: Success isn’t about size; it’s about fit. Build something that matters deeply, not something that just looks big on paper.
2. Investors Are Not All Equal
Many founders dream of raising from a famous VC. But Paine was quick to clarify that the investor’s name matters far less than their value:
“Unless you’re backed by the top 60–70 firms globally, which VC invested in you doesn’t matter as much as you think.”
Top-tier firms — the likes of Sequoia, a16z, or Lightspeed — bring global networks, credibility, and faster follow-on access. But beyond that exclusive circle, most venture funds operate regionally and face similar challenges to founders: they, too, are under pressure to perform.
Rather than chasing prestige, founders should look for alignment — investors who understand their sector, business model, and growth constraints. The right investor becomes a long-term partner, not a temporary financier.
Key takeaway: Choose investors for their wisdom and chemistry, not their logo.
3. PE or VC? Know Your Fit
A recurring theme in Paine’s talk was clarity of capital.
“Some businesses are better for private equity or debt than venture. If you can’t scale big, VC money might not be the right path.”
He broke it down simply:
Venture Capital (VC) is for companies that can scale fast, break markets, and achieve exponential returns.
Private Equity (PE) or Debt Financing suits companies that grow steadily, generate profits, and need long-term support.
Paine warned founders not to confuse the two. Many early-stage entrepreneurs raise VC funding for business models that grow linearly — like service companies, franchises, or local marketplaces — only to find themselves under impossible pressure to multiply revenue 10x a year.
Key takeaway: If your business grows predictably, not exponentially, consider PE, debt, or organic growth. Don’t force a VC playbook on a company built for stability.
4. What VCs Really Want
One of the most eye-opening moments came when Paine shared what VCs actually look for behind the scenes.
“By year eight, can you hit $100M ARR, grow 25–30% yearly, and keep margins at 55–65%? If not, rethink your financing path.”
Venture capitalists invest with a strict financial model. A fund that invests $80M must typically return $240M–$300M to its Limited Partners (LPs). That means every portfolio company must have the potential to return the entire fund.
If a business cannot mathematically reach $100M in annual recurring revenue (ARR) within 7–8 years, it’s unlikely to generate the scale required for venture-level returns.
Key takeaway: Venture capital is designed for outliers — startups that can return 10x or more. If your growth model doesn’t lead there, rethink your funding strategy.
5. Breakeven Is Fine — And Sometimes Brilliant
In the age of blitzscaling, “profitable” can sound unfashionable. But Paine flipped that narrative.
“If you’re growing and keeping margins strong, breakeven is not a weakness — it’s a green flag.”
He explained that sustainable startups — those balancing healthy growth with operational discipline — are far more resilient in downturns. Reaching breakeven means independence. It buys founders time to make strategic decisions instead of desperate ones.
Many of the world’s best companies were not the fastest to scale; they were the most patient. Breakeven gives you options — whether to keep control, attract better investors later, or expand without dilution.
Key takeaway: Profitability isn’t the opposite of growth — it’s what keeps your growth alive.
6. Fund Size Matters More Than You Think
Founders often overlook a crucial factor in fundraising: the size of the fund they’re pitching to. Paine gave a simple rule of thumb:
“Looking to raise $10M? Target funds of $200–300M. The billion-dollar funds play a different game.”
Here’s why:
A $50M fund can’t afford to write many $10M checks.
A $1B fund won’t bother with a $10M deal because it’s too small to move the needle.
Understanding this dynamic helps founders aim their fundraising efforts effectively. A mid-sized fund aligns with a Series A or B round; micro funds fit pre-seed and seed stages. Matching your ask to the fund’s capability increases your chance of success.
Key takeaway: Fund size determines check size — and your best-fit investor.
7. Focus on Product, Not Capital
In an era of pitch decks and funding announcements, Paine’s final advice was refreshingly grounded:
“Great products win. Update your GitHub, stay active on X, and if you go viral, the money will come to you.”
He urged founders to obsess less over investor interest and more over product excellence, public proof, and user traction. A great product builds its own momentum — and when users talk about you, investors notice.
Visibility, authenticity, and momentum now matter as much as financial forecasts. In fact, many VCs today actively monitor open-source projects, social media signals, and user communities to spot emerging founders.
Key takeaway: If you build something genuinely remarkable, you won’t need to chase capital — it will find you.
Final Advice
As the session wrapped up, one message stood above all: VCs are not the stars — founders are.
Paine reminded everyone that venture capital should serve as “gasoline on fire,” not the fire itself. The strongest founders know who they are, why they’re building, and which kind of growth story they want to live.
Before raising a dollar, every founder should ask:
✅ Is my business truly scalable?
✅ Do I understand the investor’s math?
✅ And am I building something because it matters — or because it looks like what others are building?
A Big Thank You
A heartfelt thank-you to Jeffrey Paine, Co-founder and Managing Partner at Golden Gate Ventures, for sharing his unfiltered perspective on what venture capital truly means today.
This wasn’t just an AMA — it was a masterclass in startup realism. The conversation stripped away the buzzwords and revealed the discipline, clarity, and courage it takes to build the right kind of company.
The future of entrepreneurship in Asia isn’t just about chasing unicorns — it’s about building sustainable, scalable, and meaningful ventures that fit their markets.
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