Lots of folks who should know better scoff at the hockey stick growth projections found in pretty much every start up business plan prepared for pitching venture capital investors. And, indeed, most of those projections never materialize. That mismatch between startup ambition and startup reality is one reason some entrepreneurs are reluctant to pitch hockey stick growth. And that’s a mistake.

The fact is that without hockey stick growth at some point, it is all but impossible to generate the kind of exit values needed to attract venture capital investment. Go ahead; run some numbers. Say you need $5 million of early stage venture capital, and say $10 million of later stage risk capital. Figure the early stage money owns 25% of the company at the exit. To get that 10x return, the exit has to be $200 million. (Note that these numbers are biased – compared to the real world of VC circa 2021. In today’s VC environment, the capital investment is usually bigger, and thus demands even larger exit proceeds.)

Now, ask yourself, how much revenue do you need, at what kind of growth rate, to generate a $200 million exit value?   The answer – whether the nut is bigger at exit with a slower post-exit growth rate, or smaller at exit with a higher post-exit growth rate – is going to include a hockey stick rate of growth before, during or after the exit.

As noted above, it’s quite true that most hockey stick growth projections never materialize. But that’s because most startups don’t deliver the 10x early stage venture capital investment returns upon which the industry is premised. If you limit your universe to venture-backed startups that achieve solid venture investment returns, you’ll find a hockey stick growth curve. Probably later than projected; maybe sooner. But always there.

So, the next time some VC (or colleague) chuckles at your hockey stick growth curve, remind them that the VC business model is based on investing in deals that deliver them. If you can’t come up with one that passes the blush test, don’t waste your time pitching venture investors.