Venture investments don't typically work that way: the goal isn't incremental returns YoY but rather major returns in the long term. Raise a fund, make a bunch of investments, report growth in valuation YoY (based on increasing valuations of portfolio) and then deliver returns once portfolio companies start to exit.

If BitWarden can use that $100m to 10x their valuation and then exit (whether that's an acquisition, going public etc.) the investors will have secured a win: if BitWarden's valuation stays where it is and returns ~$10m/year to the investor(s) over the next decade, that's not a great outcome considering the opportunity cost of capital.

Debt equity is the type of financing you're describing: lower risk, lower returns, not particularly exciting and not particularly attractive to investors if they believe the company has substantial upside potential.

Yes, I'm not familiar with expected returns for investments so my back-of-napkin maths was based on approximate housing inflation in the UK. I figured they'd want more than that as a minimum.

Clearly Bitwarden isn't a unicorn, being a smaller entity in a growing market; do VCs really expect a 10x (in couple of years?) from that sort of investment?

So, do you agree with my basic premise that they'll need a whole heap of customers, that they don't seem likely to get, in order to make any dent in the investors hoped for returns?

I’d suggest with almost absolute confidence that they are betting on unicorn status for BitWarden. I’d be surprised if they expect anything less than a >$2.5bn exit.