Many people hear "Venture Capital (VC)" and immediately think of: high growth, high returns, soaring valuations, and finally ringing the bell for an IPO — like a fast-paced, feel-good movie.
But the primary market is more like a long-distance race: what often creates the real gap isn't who speaks more passionately, but ratherCan companies turn “ideas” into “evidence,” push “evidence” to “scale,” and then grow “scale” into “governance”?”;In the end, you still have to answer the most realistic question:What does the path for exiting look like?
Uber's story is perfect for telling VCs, not because it's perfect, but because it's typical – you can clearly see: funding coming in at different stages, actually performing different tasks.
A thought on a snowy night: Romance can be a starting point, but investors want verifiable transactions.
Uber's often-cited origin story is a snowy night in Paris in 2008: Travis Kalanick and Garrett Camp couldn't hail a taxi on the street and had the idea, "What if you could call a car with your smartphone?" This story is compelling, but the investment market doesn't just buy stories; it cares more about—Can you turn this pain point into a repeatable, scalable, and manageable business operation?
In other words: you don't just need to make people "feel like it makes sense"; you need to make them "willing to pay for it, and keep paying for it."
The earliest money wasn't for kingly ambitions, but to last a few more months and gather evidence.
The most brutal part of the early stages is that a company isn't yet qualified to talk about "expansion" because you first have to prove that "demand genuinely exists."
So the earliest funding often comes from the "3 Fs" (Friends, Family, and Fools) – money based on "I believe in you first." This isn't to criticize anyone, but to describe reality: the risk is so high at this stage that most professional institutions won't rush to invest.
Uber went through this early on. In October 2010, when it was still reported as UberCab, it completed approximately $1,250,000The seed/angel round, with investors including First Round Capital, Lowercase Capital, Founder Collective, etc.
This money isn't typically used to "conquer the world." It's more like a life support package: to make the product usable and demonstrate real demand in one city, giving the "idea" its first chance to become a "replicable model."
When will VCs start betting seriously? When you start speaking with numbers, not with passion.
VC will step on the gas when a company can prove that the demand is real, the retention is real, and the unit economics have a chance to be viable.
In February 2011, Uber announced the completion of 11,000,000 USDFunding, led by Benchmark.
Translate this passage into plain language:
VCs don't invest based on how much you're earning today, but on whether you have the potential to become a “market-level company.”
So VCs offer more than just money; they often bring board governance, recruitment resources, and credibility for the next round of fundraising. Conversely, you also have to accept tougher milestones, a faster pace, and clearer division of responsibilities.
Why do VCs often “not accept ”small and beautiful'"? Because their performance structure is inherently uneven (power law).
Many people wonder: After taking VC money, why can't we take our time, make steady profits, and just be a mid-sized company that's profitable year after year?
The reason isn't profound, it's actually quite stark: the return distribution of VCs is highly skewed, with most returns often contributed by a few superstar winners. This phenomenon is frequently described by the "power law."
Because of this, VC thinking naturally leans towards a few things:
Are you targeting a "big enough market"?
Does your growth achieve "economies of scale"?
Can your exit strategy accommodate a large-scale buyback?
For a case like Uber, early investors could indeed see enormous paper returns. For example, a Reuters report in 2017 mentioned that Benchmark's Uber stake was once estimated to be close to 9 billion(which is precisely why subsequent equity transactions and exit arrangements will become extremely sensitive).
Let's add a commonly overlooked reality: VC/PE funds are mostly closed-end funds with time pressures for investment and returns (commonly 7-10 years or more, with potential extensions). When the time comes, the fund needs to return the money to its investors – this makes "exits" more than just a slide in a presentation; they must be designed into the contract from day one.
You need to clarify the concept: TPG in Uber is more like Growth Equity, not Buyout.
Many people hear "PE entry" and instinctively think: M&A, controlling stake, takeover.
But this part about Uber is more typical Growth Equity (Growth Stock/Late-Stage Growth Capital)Large checks, usually for minority equity stakes, aim to support expansion and institutionalization, rather than outright buying and rebuilding the company.
In August 2013, Uber confirmed its completion 258 million U.S. dollarsFinancing, Google Ventures, and TPG Growth were all reported as investors; TechCrunch at the time also reported that the valuation for this round of funding was around $3.4 billion pre-money / $3.76 billion post-money Magnitude.
TPG's positioning of its Growth platform is also clearly centered on "growth investing."
This distinction is crucial because the investment logic for both is completely different:
- BuyoutTypically assumes obtaining control as a prerequisite, emphasizes restructuring governance, capital structure, and operational efficiency, and may involve leverage.
- Growth EquityMore commonly, minority stakes are used to support high-growth companies, transitioning them from "running fast" to "running far and not easily overturning."
The Price of Governance: When Capital Demands Founders “Get Off,” It's Not Drama, It's Fiduciary Duty
When we talk about "institutionalization," we inevitably encounter reality: as companies grow, they can no longer rely solely on the founder's will and startup culture; governance, compliance, and risk management shift from being optional advantages to mandatory requirements.
One of Uber's most iconic turning points was Travis Kalanick's resignation as CEO in 2017. Multiple media outlets, including Reuters, reported that investors (including Benchmark) pressured Kalanick to step down. The incident was also linked to accumulated controversies surrounding the company's culture, management, and compliance.
If you put this into the context of "capital's role," it becomes less romantic but closer to the truth:
Early-stage capital acts as an accelerator; late-stage capital (including growth equity/late-stage institutional funds) functions more like a coach and referee. When founders become a risk or bottleneck, the capital markets don't necessarily prioritize sentiment; they prioritize fiduciary dutyBecause the company at this time no longer belonged solely to the founder, but also to all shareholders.
IPO: Not a fairy tale ending, but putting the company under a stronger spotlight
Uber went public in May 2019, IPO pricing $45 per shareAxios at the time reported its valuation was approximately 75.5 billion USDfully diluted valuation exceeds $82 billion。
The most important change from going public isn't just that stocks can be traded, but rather:
You must start disclosing operations and risks in a more transparent and verifiable manner, on an ongoing basis; previously, the board of directors asked you, but now the market, regulators, media, and quarterly financial reports will all question you, and they will not go easy.
Exiting isn't just about IPOs: selling a company after it's listed (or handing it over to someone better suited for the next phase) is also a business model.
Viewing an IPO as the only outcome can easily narrow one's perspective on business.
In practice, there are indeed business owners who are skilled at "from 0 to 1, from 1 to 10"; however, they may not necessarily want to tie their lives to "public company governance + regulatory compliance + quarterly reporting rhythms." Therefore, after an IPO, they chooseSell company (or gradually sell control)Handing the company over to a strategic buyer who is better at long-term governance or global integration might also be a planned route – more like a build-to-sell / strategic exit, rather than giving up halfway.
The key point is:Exiting is a design, not an accident.
What if the IPO window is hot and cold? The secondary market is becoming the “middle exit.”
Another increasingly important phenomenon in recent years is that many companies are staying in the private market for longer periods, as windows for IPOs and large M&A are unstable. In this context, the secondary market has become a key exit channel, allowing early employees, angels, and even some institutional investors to partially cash out before the company goes public.
Uber itself has a representative case: Between 2017 and 2018, SoftBank-related transactions were widely reported to include "acquisitions of existing shareholder/employee stakes" (essentially large secondary transactions/tender offers), which led to issues of valuation discounts and shareholder negotiations in the transaction arrangements.
Academic and industry research has long pointed out that secondary transactions are becoming an important supplementary exit mechanism for venture capital, changing the binary choice of "only waiting for IPO or M&A."
Returning to the investor's perspective: Why would someone allocate to VC/PE? You might be buying “another source of return,” but the cost is specific.
If you treat VC/PE as "investments more exciting than stocks," you'll usually step on a landmine.
A more practical understanding is that it is aliquidity, information transparency, and complexity, to exchange configuration tools for "different sources of remuneration".
Common attractionIt will look like this:
- You want to participate in unlisted, still-growing companies (especially VC, with earlier exposure to new technologies/business models).
- You want to expand your investment portfolio from public markets to private markets, seeking more diversified returns (but not guaranteed to be better).
- Do you believe professional managers can create value in governance, M&A integration, and operational improvements (a common narrative in PE/Buyout)?
Costs and risksIt must also be made clear:
- Liquidity and Capital Call NoticePayment is not made in a lump sum and may be locked in long-term.
- Valuation frequency and transparency: Unlike publicly traded companies with daily market prices, which can easily lead to misjudgments or disputes.
- Manager Selection RiskThe same type of strategy can vary greatly depending on how well it's executed.
- Fee StructureManagement fees and performance fees (carry) actually affect after-tax net returns.
- Exit uncertainty.：IPOs, M&As, and secondary offerings may be postponed or discounted due to economic conditions.
As for "What proportion should be allocated?" — there is no one-size-fits-all answer, but there are indeed benchmarks available in the market:
- Schroders' survey/observations concerning wealth management mention that many clients who have allocated to private markets,Common configuration ranges are 1–51 TP3T or 5–101 TP3T。
- Reuters also reported on BlackRock's design for incorporating private assets into retirement products, mentioning possible allocations. 5%–20% interval (this is for specific product design and scenarios, not general advice).
A better question would be: Can I afford for this money to be inaccessible for “many years,” have slow valuation updates, and not have control over when I can exit?
If the answer is unstable, the proportion shouldn't be so large that it keeps you up at night.
The Taiwanese market is not small, but when configuring cross-border operations, "tax, reporting, and compliance" are mandatory, not optional.
Early investment in Taiwan is actually not cold. FINDIT compiles and points out:In 2024, the volume of investment in Taiwanese startups reached approximately $3.34 billion, representing a 4.51% increase from 2023 and marking a ten-year high.
The difference is that Taiwanese business owners, once they make cross-border arrangements, will soon encounter issues with tax determination, reporting obligations, completeness of documentation, and the transferability of family inheritance. Therefore, for VC/PE firms, the challenge for business owners is often not a "noun problem" but an "engineering problem": how the money comes in, how it's managed, how it's legally exited, and how it's transferred.
View venture capital as a story, and write the exit into the contract as the ending.
Uber has made one thing very clear:
Capital isn't magic, it's a relay race; each stage of funding solves a different problem and comes with a different cost.
