Beyond the Hype: Gorilla Capital’s View on Valuation, Funding, and Exits

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Startups are hard. Everyone in the ecosystem knows it, yet so much of the advice handed to founders revolves around overly simplified myths: Raise more, chase the unicorn, think big or go home. And when startups fail, the default conclusion is often that the idea was flawed or the market too small.

But what if the problem isn’t the idea — but the model?

At Gorilla Capital, we believe in building meaningful companies. Not hype machines, not slide decks for the next round. Real businesses. And we’ve built our entire investment model around that belief — starting from capital efficiency, milestone-based funding, and realistic valuations that are rooted in where you are, not where you hope to be.

And one principle guides it all:

The math should work — no matter the outcome’s absolute size.
Whether you exit at €10M, €15M, €50M or more — the structure should be healthy for both founder and investor.
That only happens when funding and valuation are aligned with progress and probability.

Why the System Is Broken: The Unicorn Bias

Most VC money flows into a small group of startups with one shared trait: they have to be billion-dollar companies to return the fund. That’s not an exaggeration — it’s math.

In a traditional venture fund, just one or two mega-winners are expected to carry the entire portfolio. This model forces VCs to make binary bets: either this startup becomes massive, or it dies trying. As a result, capital, attention, and support get concentrated at the top of the pyramid. Everyone else is left behind.

But here’s the truth: most startup exits are not unicorns. They don’t hit €1B or even €100M. The median disclosed exit is closer to €15M — and undisclosed ones are usually smaller.

So why do we build and fund companies as if €100M+ is the only acceptable outcome?

Camel Thinking: A Different Path

At Gorilla Capital, we back camels — startups that are built to survive, adapt, and grow in a capital-efficient, sustainable way.

Unicorns describe a rare outcome. Camels describe the journey. 

Camel founders aren’t chasing a fantasy — they’re building something real. They don’t raise €5M before product-market fit. They don’t hire a VP of Sales before they’ve made 10 sales themselves. They don’t scale prematurely. They move step by step. They earn the right to raise more. And they build optionality at every turn. Some camels do grow into unicorns. And we celebrate that. But we don’t start by assuming it. We start by targeting what’s most likely — and design the journey accordingly.

And we encourage something else too:
Get to profitability and cash flow positivity early. Why? Because once you’re profitable, you control your destiny. You’re no longer dependent on external funding to survive. You decide whether to grow with internal cash flow or raise more capital — on your own terms. You’re no longer a passenger hoping for the next round. You’re the driver.

Profitability builds resilience, leverage, and freedom.

Valuation Is Negotiated Probability

Let’s be honest: early-stage valuation is not a science. It’s a guess — dressed up in comparables, narrative, and conviction. If your company has no revenue, three pilot customers, and no churn data, what are we really doing?

We’re betting on the probability of future events. And Gorilla’s philosophy is simple: let’s anchor that bet in reality. Not hope. Not hype. Reality.

What have you proven? What’s the next milestone? What kind of capital do you need to reach it? That’s the valuation logic we believe in.

Because if you overvalue too early, everything becomes harder later:

• You need a bigger next round.
• You need to justify inflated expectations.
• Your cap table breaks when growth doesn’t match the story.

That’s how startups die.

Why €15M Isn’t a Ceiling — It’s a Gate

We’ve been misquoted before — that Gorilla only believes in €15M exits. That’s not true.

What we believe is this:
Every company that eventually becomes a big success — even those that go on to €100M or €1B+ outcomes — first passes through the €0–20M zone. That stage is the first meaningful milestone, not the final destination.

At the same time, the data is clear:
The median exit for tech companies is around €15M, and most exits happen through early-stage trade sales, not late-stage IPOs. That doesn’t mean you should stop there — but you should design your company so that even if that’s where the journey ends, both founder and investor win. That’s not limiting ambition. It’s building on realism.

It’s at this point — typically somewhere between €10–20M in value — that a company has:

• Demonstrated product–market fit
• Attracted paying customers
• Shown signs of sustainability
• And become interesting to potential acquirers

And then comes the key moment:

Do we double down and raise more? Do we continue building profitably? Or is now the right time to exit?

There’s no one right answer. But there’s a right mindset:
Stay in control.

Every unicorn was once worth €10M.
But not every company needs to be a unicorn to be a success. And yet, this is exactly where many companies lose control — because they’ve raised too much, too early…

The Real Cost of Overfunding — And the J-Curve Trap

Raising a huge round might feel like progress. But it often breaks startups before they’ve even begun.

Here’s what happens when you raise too much too early:

• You inflate your valuation to avoid dilution.
• That forces you to make promises you can’t yet prove.
• You overhire and overspend chasing premature growth.
• You skip steps like validation, customer development, or repeatability.

And most dangerously: you start acting like you’re in scale mode before you’ve even nailed product-market fit. This is what we call premature scaling — and it’s the #1 reason startups fail.

At Gorilla, we guide founders using the J-curve framework. It reflects the natural phases of startup development:


Customer understanding → Problem-solution fit → Product-market fit → Repeatability → Scale.

Each stage has different risks, goals, and capital needs. Trying to skip steps — usually by throwing money at the next phase — leads to wasted resources and broken companies.

Our approach:

Fund the right things, at the right time. Learn before you scale. Scale when it’s working.

Raise What You Should — Not What You Could

If someone offers you €2M but you only need €700k to reach your next milestone — should you take it?

Conventional wisdom says yes. We say no.

Because money always comes with expectations. And expectations that outrun your actual progress are not just dangerous — they’re often fatal.

When you raise more than you need, three things happen:

1. You raise your valuation to justify the bigger round, which often breaks your cap table for future investors.
2. You create pressure to scale prematurely — hire faster, spend more, “look the part.”
3. You set the bar so high for the next round or exit that even solid execution might not be enough.

This is where so many startups fall apart — not because they weren’t good companies, but because they were forced into acting like late-stage companies way too early. At Gorilla Capital, we advise a different path.
We coach founders to raise just enough to:

• Reach the next provable milestone: product–market fit, repeatable customer acquisition, or early monetization
• Avoid unnecessary dilution — protect your equity while it matters most
• Build a cap table that works even if the exit lands at €15M, not just if it’s €150M

Why does this matter? Because not every swing is a home run.
And that’s okay — as long as the math still works.
If you’re structured right, a €10–20M exit can still be a game-changing win for the founder and deliver strong returns to investors.

In our model, milestones unlock money — not pitch decks.
We fund you to reach the next step, then reassess together.
That’s how you build a company that’s not only fundable — but durable.

So the next time you think, “Let’s take the €2M while it’s on the table,” ask instead:

What expectations are coming with it? And are we truly ready for those?

Raising what you should — not what you could — is not playing small.
It’s playing smart. And staying in control.

Exit Is a Likely Outcome — Not the Strategy

One more thing. If you take VC funding, you are promising an exit — that’s baked into the logic of venture capital. You can’t raise someone else’s money without a plan to return it.

So yes, you need to build with exit in mind — but not with exit as the obsession. You don’t control the timing of an exit. The market does. The buyer does. Your job is to build a business that someone might want to buy someday — not one that needs to sell in two years or die trying.

We love Warren Buffet’s framing: “Build your business as if you’ll own it forever. Because if you don’t, you will.”

That’s optionality. And optionality is power.

Gorilla’s Final Thought

The startup world doesn’t need more unicorn hunters. It needs more founders who build enduring, resilient, meaningful businesses — the kind that create optionality, not pressure.

At Gorilla Capital, we fund camel founders. Builders. Learners. Owners. People who:

• Value substance over story
• Understand where they are — and what they need next
• Build for sustainable outcomes, not speculative headlines
• Get profitable early and grow from strength, not desperation

Start from what’s most likely.
Build toward what’s meaningful.
And structure your journey so that whatever happens — founder and investor both win.

That’s what we call a happy ending.

This article was created in collaboration with Gorilla Capital. Gorilla Capital is our partner for the Arctic15 Exists Summit this year. 

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