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Ask HN: Do you regret taking investment?
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Re: Ask HN: Do you regret taking investment?
#2It seems like ten or fifteen years ago most startups went out of business due to not being able to raise money, whereas today most startups go out of business due to raising money.
Whether or not people regret this probably depends on personal utility, but I think the way most people think about this (and the standard startup advice) hasn't caught up to the new reality.
Re: Ask HN: Do you regret taking investment?
#3It seems like ten or fifteen years ago most startups went out of business due to not being able to raise money, whereas today most startups go out of business due to raising money. Whether or not people regret this probably depends on personal utility, but I think the way most people think about this (and the standard startup advice) hasn't caught up to the new reality.
"most startups today go out of business because they raised money" citation please.
Re: Ask HN: Do you regret taking investment?
#4It seems like ten or fifteen years ago most startups went out of business due to not being able to raise money, whereas today most startups go out of business due to raising money. Whether or not people regret this probably depends on personal utility, but I think the way most people think about this (and the standard startup advice) hasn't caught up to the new reality.
"most startups today go out of business because they raised money" citation please.
Speaking from observation, the claim may be considered true if the primary purpose of investment firms is to exit the position as either a large gain in value, or a complete loss. In other words, investment strategy today causes the outcome of the company to avoid finding a "happy medium" where the company is able to just make enough to pay the employees that work there to build a good product the customers like and which serves those customer's interests, even at the expense of additional revenue.
VCs don't invest in breakeven, or slightly ahead of breakeven companies. They would rather force a product move by the company to try to make more money for the stakeholders, even at the risk the move kills the company OR hurts the customer's privacy/UX experience. Case in point, Facebook.
Re: Ask HN: Do you regret taking investment?
#5It seems like ten or fifteen years ago most startups went out of business due to not being able to raise money, whereas today most startups go out of business due to raising money. Whether or not people regret this probably depends on personal utility, but I think the way most people think about this (and the standard startup advice) hasn't caught up to the new reality.
Definitely not. I've got kids and was only able to quit my job and start working full time as CTO of my startup after we raised seed funding. That being said, an A,B, and C round is different. Seed should give you enough runway to see if your initial idea gets product market fit. Future funding is fuel for the rocket ship. It lets you see if you can scale up sales and marketing around the product.
Re: Ask HN: Do you regret taking investment?
#6Earlier quoted context omitted.
"most startups today go out of business because they raised money" citation please.
Speaking from observation, the claim may be considered true if the primary purpose of investment firms is to exit the position as either a large gain in value, or a complete loss. In other words, investment strategy today causes the outcome of the company to avoid finding a "happy medium" where the company is able to just make enough to pay the employees that work there to build a good product the customers like and…
Maybe a better way of phrasing it would have been "most startups that raise money still go out of business"
Re: Ask HN: Do you regret taking investment?
#7It seems like ten or fifteen years ago most startups went out of business due to not being able to raise money, whereas today most startups go out of business due to raising money. Whether or not people regret this probably depends on personal utility, but I think the way most people think about this (and the standard startup advice) hasn't caught up to the new reality.
"most startups today go out of business because they raised money" citation please.
Maybe what the parent comment said was an over simplification. I would say most startups today go out of business because of poor spending choices, bad oversight be investors and board members, poor management in general (though financial management is the highest among the issues I see), and poor product market fit. Is this because of investment? I would argue yes it is. You learn far better financial practices when you have no cash on hand. Investors and VC's honestly aren't always the best board members and don't always help. Product market fit can be masked by investment money. My comments are all anecdotal however I do work as a consultant for VC's who invest in or purchase startups. So there is that.
One other area in which people will regret taking investment money if they are not careful is at the time of exit. Many company owners who seek investment money don't realize just how quickly they are dilute themselves. While this won't put the company out of business, it may put an individual out of the business of running a second startup. It is wise to be careful taking investment money.
Re: Ask HN: Do you regret taking investment?
#8I think the real question is whether or not the extra money is worth being beholden to other stakeholders... I know a lot of people like complete control over their company
Re: Ask HN: Do you regret taking investment?
#9It seems like ten or fifteen years ago most startups went out of business due to not being able to raise money, whereas today most startups go out of business due to raising money. Whether or not people regret this probably depends on personal utility, but I think the way most people think about this (and the standard startup advice) hasn't caught up to the new reality.
"most startups today go out of business because they raised money" citation please.
Read between the lines. He meant "many."
Re: Ask HN: Do you regret taking investment?
#10It seems like ten or fifteen years ago most startups went out of business due to not being able to raise money, whereas today most startups go out of business due to raising money. Whether or not people regret this probably depends on personal utility, but I think the way most people think about this (and the standard startup advice) hasn't caught up to the new reality.
Definitely not. I've got kids and was only able to quit my job and start working full time as CTO of my startup after we raised seed funding. That being said, an A,B, and C round is different. Seed should give you enough runway to see if your initial idea gets product market fit. Future funding is fuel for the rocket ship. It lets you see if you can scale up sales and marketing around the product.
Did you have a market fit before taking the funding?