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If you take venture capital, no matter how many smiles there are in the room, everyone's expecting to earn a big return on some timeline that makes sense to pension funds in Canada.
Simon explains his early reluctance to raise VC funding, recognizing that venture capital obligates founders to deliver outsized returns on timelines set by institutional investors like pension funds, which conflicted with his uncertainty about whether turbopuffer could be a billion-dollar company. ✦ AI generated
Simon Eskildsen · The Pragmatic Engineer · 2026-07-21 · original ↗
I understood that if you take venture capital, no matter how many smiles there are in the room, everyone's expecting to earn a big return on some timeline that makes sense to everyone involved. And 'everyone involved' are pension funds in Canada. But at the time, I did not know if turbopuffer could be a billion dollar company. It felt like a very niche kind of search engine. And that was completely fine with me!
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explains mechanism → A large VC fund's math often doesn't work because the required exit values can exceed the total available market for venture-backed exits.Bill Maris · All-In Podcastprovides context → Scale in venture is a pyramid: the market for access is so narrow that a top-5-tier fund that misses the $3 trillion companies becomes 'much harder to sell,' and because fewer than 100 companies created in the last 25 years are sustainably over $10 billion, a seed fund only needs ~5% of one ~$2.6 billion company to return its fund.David Frankel · 20VC