Most investors look at turnaround cases through what I call the “5-3 lens”:
Can I get 3x my invested capital back within 5 years?
It’s a simple logic:
A struggling company with negative EBITDA will—at best—get to a healthy, industry-average EBITDA in five years. That’s the mental model. And to be fair, it’s logical thinking. But it’s also limited thinking.
I’m far more interested in the turnaround cases where the potential is much bigger, even if the path isn’t straightforward.
If you fix something that doesn’t work, why assume it will only work “fairly well”?
Why not aim for extreme overperformance?
Maybe this mindset someday becomes a new category: turnaround VC.
Because here’s the truth:
A rocket that doesn’t work can’t fly even one meter.
But a rocket that does work might as well fly to Mars.