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Ask HN: Examples of large exits without VC Funding?

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Re: Ask HN: Examples of large exits without VC Funding?

#3

Post by meagher »

not an exit yet, but the MailChimp founders still own 100% of a 525M+ business.

And they send a lot of email, give back to their community (Atlanta, GA), and sponsor a lot of independent art and media (podcasts).

https://www.inc.com/magazine/201802/mailchimp-company-of-the...

Re: Ask HN: Examples of large exits without VC Funding?

#4

Post by troydavis »

prakster wrote: post #2

Any recent examples in the $100 Million plus arena?

One reason these are rare: if a bootstrapped company is valued at $100+ million, a small minority investment - say, 10% - is very meaningful cash for the company yet involves relatively little dilution and little or no loss of control. It gets a lot harder to justify not raising something.

(And yes, a bootstrapped business worth over $100MM is probably generating a meaningful profit, but the founders may not be comfortable reinvesting it.)

Re: Ask HN: Examples of large exits without VC Funding?

#6

Post by throwaway13337 »

Most of these companies fly under the radar because they don't need media telling investors how good of an investment they are. That just invites competition.

I used to work at a company like that. Our competitor was all over tech crunch, etc but we were completely unknown to the tech community. We still beat them because we were focused on our audience which had nothing to do with the tech world.

Re: Ask HN: Examples of large exits without VC Funding?

#9

Post by nostrademons »

troydavis wrote: post #4
prakster wrote: post #2

Any recent examples in the $100 Million plus arena?

One reason these are rare: if a bootstrapped company is valued at $100+ million, a small minority investment - say, 10% - is very meaningful cash for the company yet involves relatively little dilution and little or no loss of control. It gets a lot harder to justify not raising something. (And yes, a bootstrapped business worth over $100MM is probably generating a meaningful profit, but the founders may not be comfo…

It also helps build relationships and align incentives with powerful firms that can be very useful in arranging an exit and getting the best price for it.

Microsoft took a small mezzanine round right before they went public. They didn't need the cash, but it brought investment bankers on board so that they had an incentive to get the best possible price in the IPO. Similar story with Whatsapp; they didn't need the cash, but having Sequoia on board gave them a stamp of approval that probably helped their negotiating leverage both in attracting employees and in selling to Facebook.

Re: Ask HN: Examples of large exits without VC Funding?

#10

Post by tedmiston »

There's probably a bias here around bootstrapped founders exiting at lower valuations because the take home of 100% of 10M is easier to get than 5% of 200M.

I made up the numbers here but I think many founders are happy to get that first or second base hit of change your life but not quite FU money safety net vs VC money forcing the bipolar choice between home run or strike out.

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