The Peel with Turner Novak

Untold Startup Lessons from Dozens of Academic Research Papers with Dan Gray at Equidam

31 snips
Sep 25, 2025
Guest
Dan Gray
Dan Gray, Head of Insights at Equidam, dives into the world of startups and venture capital, armed with insights from academic research. He discusses the pitfalls of premature scaling, emphasizing that 70% of failures stem from raising too much cash too soon. The importance of origination stage investing is highlighted, revealing how first-check investors significantly affect startup viability. Gray also critiques the phenomenon of ‘startup catering’, where founders conform too much to investor expectations, leading to a sea of sameness in new ventures.
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INSIGHT

Required Returns At Pre-Seed

  • Pre-seed investors should aim for extremely large upside, roughly 200x on initial valuation to cover dilution and failure rates.
  • Expected dilution and milestone success probabilities drive the high required return multiples for early-stage VC.
INSIGHT

Venture Has Become Many Strategies

  • Much of what is now labeled 'venture' is capital allocated in the VC bucket but behaves like different strategies than traditional early-stage risk-taking.
  • The expansion of capital into later-stage, spreadsheet-driven investing dilutes the original venture model and shifts incentives toward fees and markups.
ADVICE

Invest Earlier To Multiply Impact

  • Shift capital earlier in the funding pipeline rather than simply increasing total allocation to boost innovation and productivity.
  • Funders should prioritize origination-stage allocation to expand the funnel of potential breakout companies.
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