Ask HN: Do bootstrapped billion-dollar companies exist? • Hacker News Board

Re: Ask HN: Do bootstrapped billion-dollar companies exist?

#131

Post by [deleted] » Fri, Jul 25, 2014, 4:18 PM UTC

joshjdr wrote: post #128

logicallee wrote: post #118

Earlier quoted context omitted.

it might be pretty easy to work out but that's not how valuations at a billion dollars work. Only actual transactions in shares would establish this kind of a valuation. I mean just consider our specific example: at $10M profit, the price per earnings if you purport to be a billion dollar company, is 100. So, no alternative accounting metric would ever give you a billion-dollar valuation (assuming you bootstrapped, w…

If the $60 million investment came in with a pre round valuation of less than $1b then the example given does not meet the requirement.

[deleted]

Re: Ask HN: Do bootstrapped billion-dollar companies exist?

#132

Post by optimusclimb » Fri, Jul 25, 2014, 5:29 PM UTC

EliRivers wrote: post #116

optimusclimb wrote: post #111

Earlier quoted context omitted.

Thanks for building a shitty company and product that I'm forced to use. Enterprise! Seriously. Meditate on that word. We were actually forced by my company to move our "How to use this repo, get it up and running, etc" documentation out of README.md at the root of our github repos, to the Atlassian Wiki because, "this is how we do things now." Fuck your terrible editor that adds random double spacing, and in general…

Your software makes it harder for me to get my job done If the tool isn't helpful, don't fucking use it. I can draw you a diagram if that would help. If someone is forcing you to use an unsuitable tool, where do you think you should direct your opinion?

Yes, please draw this diagram. Do it in Confluence while you're at it.

Yes, it sucks that I'm forced to use a crappy tool. That happens all the time in the software world. Sure, you can take the HN fantasy path and quit every job you have every time you disagree with something, but you'll never make any real progress that way. I'm still working hard to ship a good product in spite of the fact that some aspects of how I build it will be sub-optimal.

However, if the people that work on shitty products would fight back a little bit more, perhaps those of us forced to use them wouldn't find it so distasteful.

Re: Ask HN: Do bootstrapped billion-dollar companies exist?

#133

Post by hashtag » Fri, Jul 25, 2014, 6:25 PM UTC

Microsoft...

In a talk given by Bill Gates, he mentioned that Microsoft only took on an investment once and it wasn't because company needed money but because Bill Gates wanted to bring on an investor to be on Microsoft's board of directors and that was the only way to do so. Supposedly that investor has been on the Microsoft board for decades.

Obviously because they technically did raise funding, might not satisfy the question

Re: Ask HN: Do bootstrapped billion-dollar companies exist?

#134

Post by daiidgo » Fri, Jul 25, 2014, 7:54 PM UTC

projectramo wrote: post #129

I think part of the problem is in how you value companies. Basically, you can only "value" a company when someone makes an investment. So if a (sophisticated?) person or VC invests in it, or if it goes public, we would consider that an estimate of value. If no one invests in it, and you are clipping coupons, how would you know you have a billion dollar company? You could have $100 million a year in earnings and some…

Actually, if you have multiple owners you really want to have your company appraised on a regular basis (every 6 months if you're beyond a little startup). Reason being, if you should happen to encounter an event that triggers a buyout right of one of your members/shareholders/partners, you want a contractually accepted valuation to control the cost of the buyout. Well planned valuation procedures can really help avoid costly litigation over the value of an ownership interest.

Appraisers can value your company above a billion dollars without you ever taking on an outside investor. If someone does go to invest, they're going to hire their own appraiser (or entire firm of economists) to determine how much your company is worth prior to investing.

Appraisals aren't free, but they have significant long term benefits. Their estimate of your company value tends to be as accurate as any potential investor's estimate (competing biases on other sides of the ideal valuation).

Re: Ask HN: Do bootstrapped billion-dollar companies exist?

#135

Post by HeyLaughingBoy » Fri, Jul 25, 2014, 9:58 PM UTC

ownagefool wrote: post #114

optimusclimb wrote: post #111

Earlier quoted context omitted.

Thanks for building a shitty company and product that I'm forced to use. Enterprise! Seriously. Meditate on that word. We were actually forced by my company to move our "How to use this repo, get it up and running, etc" documentation out of README.md at the root of our github repos, to the Atlassian Wiki because, "this is how we do things now." Fuck your terrible editor that adds random double spacing, and in general…

The reason HN will downvote you isn't because they agree or disagree on whether or not jira and confluence are crap but it's because you clearly should be pointing the blame at whoever made the call force it on you, which isn't Atlassian. Oh and "Enterprise" is the problem. Let's use complicated shit that doesn't really solve anyones use cases particularly well, but manages to fudge along for everyone so seems like a…

Actually I downvoted him for pure rudeness, plain and simple.

Re: Ask HN: Do bootstrapped billion-dollar companies exist?

#136

Post by wsh91 » Fri, Jul 25, 2014, 11:17 PM UTC

voltagex_ wrote: post #97

davidbanham wrote: post #90

Earlier quoted context omitted.

They're not going anywhere. The recent change to the corporate structure has been for tax purposes. They will continue to grow overseas, but I don't see them closing Sydney any time soon.

Ack. Somewhere the two ideas (moving vs restructuring) got conflated in my head. Now I can't delete that comment. Thanks for the pointer.

Yeah--Sydney's actually our largest office by far. :) (I work in SF.)

Re: Ask HN: Do bootstrapped billion-dollar companies exist?

#137

Post by logicallee » Sat, Jul 26, 2014, 7:06 PM UTC

joshjdr wrote: post #128

logicallee wrote: post #118

Earlier quoted context omitted.

it might be pretty easy to work out but that's not how valuations at a billion dollars work. Only actual transactions in shares would establish this kind of a valuation. I mean just consider our specific example: at $10M profit, the price per earnings if you purport to be a billion dollar company, is 100. So, no alternative accounting metric would ever give you a billion-dollar valuation (assuming you bootstrapped, w…

If the $60 million investment came in with a pre round valuation of less than $1b then the example given does not meet the requirement.

Well, the thing is that $60 million is definitely not a "seed" amount of money - it's a ton of money.

In the context of the real world, your way is quite an odd way to interpret the "requirement" -- no money taken, ever, until the very first money that is sold for a percentage is raised at a valuation of $1 billion. Why? Why not let the first valuation be lower?

Under a more reasonable interpretation, i.e. totally bootstrapped, and eventually reaches $1 billion, the stated company meets the criteria. It's worth triple that now, and $60 million as a first raise eight years in is proof positive that it's a "totally bootstrapped business".

I can see where you're coming form, if the question is interepreted as "can I become a billionaire without selling any equity, by completely owning a billion-dollar totally bootstrapped business", but then it isn't nearly as interesting.

Re: Ask HN: Do bootstrapped billion-dollar companies exist?

#138

Post by catshirt » Sun, Jul 27, 2014, 5:15 AM UTC

brianfitz wrote: post #124

shreve wrote: post #65

Earlier quoted context omitted.

Actually, they're valued at $100B. http://signalvnoise.com/posts/1941-press-release-37signals-v...

That article was intended to be a joke. 37signals (now Basecamp) is private and doesn't publicly announce revenue or profits -- though Jason has acknowledged both are in the millions.

it's satirical but is it a joke? valuation is not a pure function of revenue and profit. unless i am missing something this valuation is as real as Twitter's or Facebook's. that's the joke.

Re: Ask HN: Do bootstrapped billion-dollar companies exist?

#139

Post by projectramo » Thu, Aug 07, 2014, 4:18 PM UTC

daiidgo wrote: post #134

projectramo wrote: post #129

I think part of the problem is in how you value companies. Basically, you can only "value" a company when someone makes an investment. So if a (sophisticated?) person or VC invests in it, or if it goes public, we would consider that an estimate of value. If no one invests in it, and you are clipping coupons, how would you know you have a billion dollar company? You could have $100 million a year in earnings and some…

Actually, if you have multiple owners you really want to have your company appraised on a regular basis (every 6 months if you're beyond a little startup). Reason being, if you should happen to encounter an event that triggers a buyout right of one of your members/shareholders/partners, you want a contractually accepted valuation to control the cost of the buyout. Well planned valuation procedures can really help avo…

That makes sense, and I agree with you. I will point out that those appraisals are usually kept private so we still have to base our valuations on announced deals. (In the original context of trying to value a bootstrapped company).