I understand your concerns, I am just pointing out the general dissatisfaction raised here and the expectation of enshittification being the default.
I would also like to point out that you are extrapolating a bit too hard. The claim that backers will want a 10x return is not necessarily correct, nor are the examples of 220/540m valid from a valuation perspective.
There are PE firms which do not seek such exorbitant returns. Without having eyes on Arduino's financials, it's hard to say that the growth expectations are as noted. As for the valuation, the implied post-money (i.e. after-investment) valuation depends on for what percentage of equity the 54m was offered for (where the implied post-money valuation would be 54m divided by the percentage, e.g. 108m with 54m paid for 50% of ordinary shares). Other factors such as preferences etc. impact this too.
I wouldn't be so eager to get mad, that's all. I am still hopeful for Arduino's future and hope that they put the capital to good use (instead of '10x'ing it).
Except they did not accept funding from PE firms, they accepted it from completely typical VC funds, who state on their websites things such as the following:
“Anzu Partners is an investment firm that focuses on industrial and life science technology companies with the potential to transform their industries.”
“[CDP Venture Capital seeks to] foster the growth of the Italian market by attracting new national and international investors to the Venture Capital asset class by promoting a new culture of Venture Capital and entrepreneurship in Italy.”
In case you are unaware, these statements are VC dog whistles for not 10x but 100-1000x returns, without some probability of which the VC model does not work financially.
This is entirely untrue- this is squarely in the realm of growth investment, for which you're typically underwriting for 3-5x cash on cash returns over a 5 year old period
It is extremely unlikely that these funds see a path to returning >10x
Maybe things have changed but the VC model is usually unicorn or GTFO. Of course not every company will turn into one but every company they invest in should have the potential. If I'm a VC I invest in Arduino because of two storylines. It's either the "Coke" of microcontrollers (sticky brand) or the "Github of microcontrolers" (sticky platform via IDE) or a combination of both.
VC as an asset class encompasses a lot of different risk/reward profiles
What you're describing is more typical of a seed fund that is counting on one deal to return the portfolio
In a growth deal like this, esp with such an old company by VC terms, funds tolerate lower upside in exchange for capped downside and predictable returns, given that the chances the chances of complete failure/bankruptcy are comparatively less
I would also like to point out that you are extrapolating a bit too hard. The claim that backers will want a 10x return is not necessarily correct, nor are the examples of 220/540m valid from a valuation perspective.
There are PE firms which do not seek such exorbitant returns. Without having eyes on Arduino's financials, it's hard to say that the growth expectations are as noted. As for the valuation, the implied post-money (i.e. after-investment) valuation depends on for what percentage of equity the 54m was offered for (where the implied post-money valuation would be 54m divided by the percentage, e.g. 108m with 54m paid for 50% of ordinary shares). Other factors such as preferences etc. impact this too.
I wouldn't be so eager to get mad, that's all. I am still hopeful for Arduino's future and hope that they put the capital to good use (instead of '10x'ing it).