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Ask HN: Did anyone's life ever gotten more comfortable after accepting funding?

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Re: Ask HN: Did anyone's life ever gotten more comfortable after accepting funding?

#41

Post by jacquesm »

ido wrote: post #37
jacquesm wrote: post #9

Investor goals and founder goals are rarely aligned. If you want to go for world domination and would rather risk everything to achieve that and possibly end up with nothing at all then go the investor route. That will increase your chances of ending up with nothing, but it will (perversely) also increase your chances of success. If you're already happy at your current level just grow it organically and don't look ba…

take note that the slow/"safe" way also has its own risk - that someone will discover your currently-secret goldmine and overtake you due to having more resources/connections/investment.

Or even worse: that instead of competing with you on quality and reach they start giving it away, before inevitably going bust. They'll destroy the market for you anyway...

But that risk always exists, even for funded companies these risks are present. It's an arms race and if your opponent reaches for the nuclear option you have to be very patient and stable if you intend to wait them out and they may even succeed.

Re: Ask HN: Did anyone's life ever gotten more comfortable after accepting funding?

#42

Post by forgetsusername »

twidlit wrote: post #14

Why not just take a loan from a bank? That way you can spend that hiring and managers to let you off the hook of day to day operations.

>Why not just take a loan from a bank?

Precisely. Is the startup world so financially uneducated that they see taking venture capital as the only means of raising capital, or worst yet, some sort of duty?

The post practically says the company is awash in money, which would mean there are multiple ways to raise cash. The real question is why are you raising money?

Re: Ask HN: Did anyone's life ever gotten more comfortable after accepting funding?

#43

Post by tehayj »

jacquesm wrote: post #41
ido wrote: post #37

Earlier quoted context omitted.

take note that the slow/"safe" way also has its own risk - that someone will discover your currently-secret goldmine and overtake you due to having more resources/connections/investment.

Or even worse: that instead of competing with you on quality and reach they start giving it away, before inevitably going bust. They'll destroy the market for you anyway... But that risk always exists, even for funded companies these risks are present. It's an arms race and if your opponent reaches for the nuclear option you have to be very patient and stable if you intend to wait them out and they may even succeed.

That's where our unfair advantage comes in. We know already some companies who work on replicating what we do and they have good chances to make this happen, but...

- Our product is hard to replicate and this will take them time and give them a lot of headache. We know some companies gave up.

- We build our own competitor in the same niche right now (under different leadership but I still hold control) so we cover the first and second spot in it. They are talented and can copy us first. So if people want choice they will get that.

- We dominate the conversation and have some things in place that ensure it will stay like this.

Regardless of all this, I'm fine if we would loose the top spot because the market is growing so fast that even a smaller piece of the pie is a decent sized one and we keep the whole operation extremely lean and focused so we we will stay profitable no matter what.

Re: Ask HN: Did anyone's life ever gotten more comfortable after accepting funding?

#44

Post by sharemywin »

twidlit wrote: post #14

Why not just take a loan from a bank? That way you can spend that hiring and managers to let you off the hook of day to day operations.

if there no cash flow or assets banks are hard to work with. Unless you want to risk your house etc.

Re: Ask HN: Did anyone's life ever gotten more comfortable after accepting funding?

#45

Post by StavrosK »

tim333 wrote: post #35
asifjamil wrote: post #10

Earlier quoted context omitted.

> But there are tons of businesses that are better off using revenue as funding. Any specific examples?

Fog Creek is an interesting example partly because it's written up and also because it's kind of a hybrid where they've remained self funded but spun off VC funded ventures in Trello and in some ways Stack Exchange http://www.foundersatwork.com/joel-spolksy.html

Interesting how that page has misspelt Spolsky's last name in half the places.

Re: Ask HN: Did anyone's life ever gotten more comfortable after accepting funding?

#46

Post by jacquesm »

tehayj wrote: post #43
jacquesm wrote: post #41

Earlier quoted context omitted.

Or even worse: that instead of competing with you on quality and reach they start giving it away, before inevitably going bust. They'll destroy the market for you anyway... But that risk always exists, even for funded companies these risks are present. It's an arms race and if your opponent reaches for the nuclear option you have to be very patient and stable if you intend to wait them out and they may even succeed.

That's where our unfair advantage comes in. We know already some companies who work on replicating what we do and they have good chances to make this happen, but... - Our product is hard to replicate and this will take them time and give them a lot of headache. We know some companies gave up. - We build our own competitor in the same niche right now (under different leadership but I still hold control) so we cover th…

> we keep the whole operation extremely lean and focused so we we will stay profitable no matter what.

This is key, as long as you can maintain that you will survive and might even win against a much bigger competitor.

Re: Ask HN: Did anyone's life ever gotten more comfortable after accepting funding?

#47

Post by seibelj »

tehayj wrote: post #43
jacquesm wrote: post #41

Earlier quoted context omitted.

Or even worse: that instead of competing with you on quality and reach they start giving it away, before inevitably going bust. They'll destroy the market for you anyway... But that risk always exists, even for funded companies these risks are present. It's an arms race and if your opponent reaches for the nuclear option you have to be very patient and stable if you intend to wait them out and they may even succeed.

That's where our unfair advantage comes in. We know already some companies who work on replicating what we do and they have good chances to make this happen, but... - Our product is hard to replicate and this will take them time and give them a lot of headache. We know some companies gave up. - We build our own competitor in the same niche right now (under different leadership but I still hold control) so we cover th…

That is amazing! Some killer instincts in you, make your own competition to kill the other competition. Incredible

Re: Ask HN: Did anyone's life ever gotten more comfortable after accepting funding?

#48

Post by DelaneyM »

tl;dr: Know what you're going to do with every dollar before you raise it (early). Also, VC investment isn't the only investment; if you won't have breakneck growth consider private equity.

I dislike having investors, as a general rule. They meddle. However, when you take investment it's important to do so intentionally and purposefully.

Good fundraising: "With X thousand dollars we can hire Y developers to build Z feature, which we project to generate a positive net return within N months."

Bad fundraising: "Who-hoo, we're funded! Let's buy some Aeron chairs and kitchen snacks and move to The Mission!"

In your situation: if you have an unfair advantage in a fast-growing market, and you can increase your edge and get more customers/revenue/value with investment quickly enough that the investment pays for itself, then consider it. If the features/hires/investments you could make with that money also fill you with excitement and anticipation, then do it.

If you don't want to be busier and you're happy with what you have, stay far away from investors for both of your sakes. They'll get frustrated by having a "zombie company", you'll get frustrated by their frustration.

Finally, consider pursuing alternative investors. There are many smaller-scale private equity firms (or individuals) which are more comfortable with making investments to generate steady, predictable & consistent cashflow. They might be better aligned with your personal goals.

Re: Ask HN: Did anyone's life ever gotten more comfortable after accepting funding?

#49

Post by tehayj »

DelaneyM wrote: post #48

tl;dr: Know what you're going to do with every dollar before you raise it (early). Also, VC investment isn't the only investment; if you won't have breakneck growth consider private equity. I dislike having investors, as a general rule. They meddle. However, when you take investment it's important to do so intentionally and purposefully. Good fundraising: "With X thousand dollars we can hire Y developers to build Z f…

Thank you. Everyone who seeks funding should probably understand this.

We are fine in terms of money, I just had this (misguided) idea that getting funding now helps me to be even less involved in the project but since my decisions made this a success I think we really look to sell the whole thing.

Before we do this we will keep growing it for a little longer and try to make everyone replaceable. It doesnt matter much for us anyway. We just want to get done with the making money part of our life and will get there regardless if we sell or not until the end of the year.

Re: Ask HN: Did anyone's life ever gotten more comfortable after accepting funding?

#50

Post by elmar »

elmar wrote: post #11
joelrunyon wrote: post #4

"Outside money is expensive" - http://nathanbarry.com/profit/

this is a great real life bootstrapping example. I personally think the best of both worlds is to take funding but still continue with the mindset of a bootstraped company, but you have to choose your VC's carefully.

looks like the article now as is own discussion thread

https://news.ycombinator.com/item?id=12000311

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