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Ask HN: Sell my startup for $14M because I can't raise $2M?
141–150 of 336 posts
Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#142Earlier quoted context omitted.
The google servers download every image, regardless of whether or not the user later opens it or not. So since every image is downloaded, and subsequent downloads come from google cache, the pixel becomes an ineffective way of tracking open rate.
You can only get the image from cache if it's the same URL. You can still vary those between recipients.
But if it's a different URL for each recipient then google will fetch each individual URL, for each email. So every URL will be opened exactly once, by the google fetch that happens when the google server receives the email. The user will fetch the pixel from google cache. So how can you track open rates by pixel download when 100% of pixels are downloaded just one time?
It probably depends on email clients. If a desktop client fetches email direct from smtp then it will probably also fetch the pixel directly. So tracking all downloads after the first (by google) may yield some signal, albeit not for gmail web users.
Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#143Which will you regret more? Selling knowing you could have made more, or losing it all knowing you were a contender and gave it your best short?
Do the one you'll least regret if it turns out badly.
Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#144Earlier quoted context omitted.
"Even if you'd eventually make $50m, your life wouldn't change much from a net worth of $14m to $50m. You could buy a nicer jet?" I know you're kidding around here, but all kidding aside, whether your net worth is $14M or $50M, you can't afford a jet. (I mean, nominally speaking, you can front the sticker price -- but you'll get eaten alive on fuel and maintenance over the jet's useful lifespan, and the jet as an ass…
At 14M you are already in the territory where a jet card is definitely something you could afford. If I had that sort of money, I would use a jet card for flights within a continent and go first class commercial for intercontinental (and definitely use VIP terminal or at least meet and greet services). But at 50M you might be looking at fractional jet ownership already. There is a difference and it's a big one.
Let's pretend someone has arrived upon 14 million in after tax net worth (not the case in OP's scenario).
You want to be set "forever" and not dependent on working again. You'll probably work, but may not be able to replicate the same financial success you experienced previously, so it's hard to count on future income.
There's a debate around what's called the "Safe Withdrawal Rate" which is financial-market speak for: how much of my nest egg can I spend every year and never run out of money, ever?
There's some debate about the exact number but I'll use 3% net of investment fees as a solid number. 3% of 14 million is $420k. You've got $420k pre tax to spend. Fortunately taxes on capital income are usually lower than taxes on earned income, so your tax rate will decline and probably end up somewhere in the high 20s. You'll end up with about $320k after tax to spend. Not bad. But not what most people think about as rich, either. I wouldn't be buying jet cards at that level.
I'm not saying the money isn't important - to the extent it gives you control over your time in the future (a function of spending habits), it is extremely valuable. But there's often a disconnect between high 7 and very low 8 figure net worth and assumed income/perceived lifestyle that people can live, especially if they stop working or were in a field with one-time exits (some entrepreneurs, retired athletes, etc).
Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#145Just take the money then start a new startup.
Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#146Earlier quoted context omitted.
I dined once with a billionaire and a couple of multimillionaires. The billionaire owned a jet. The multimillionaires were envious of him because they only owned jet timeshares . (If you own your own jet, it's always where you want it, you can decorate it the way you want, and you can leave your stuff in its bedroom and living room. It's like having a pied-à-terre in a city instead of renting a hotel room each time y…
My experience tells me you're lowballing the crew salaries; your pilot alone draws at least $200k. You probably don't pay for the rest of the crew, but you do pay monthly fees for storage, private airstrip clearances, and ad hoc (big) costs each time you fuel it up, 'rent' an attendant, and cater the flight.
I think it really depends on what you expect from your crew. Let's say you have a rotating pool of four 1-2K hour pilots, with 2 on deck for each flight on a week-on/week-off schedule. Skip the 'attendant', have the crew fuel up, and I think you could probably get away with $200K/yr for the personnel costs, depending on taxes/benefits.
Obviously the number, length, and complexity of flights would have a big impact as well. For 1 or 2 round-trip domestic flights per week, it should be doable.
Source: Had a friend who worked on several private flight crews that operated like this.
Edit: They mostly worked with clients in the $100MM/yr range, who tended to treat their staff like garbage and consequently had high turnover. Über-rich lurkers, YMMV.
Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#147IMO You need to look into both options until you get at least (a) a letter of intent for acquisition or (b) a term sheet from a VC. If you can, get both, then consider taking the VC money if you can get a significantly higher valuation and good terms. I recall a VC interview recently where he said (paraphrasing) not accepting cold emails and requiring an introduction is a filter that proves you know how to hustle and…
Re the "know how to hustle" thing - building a successful business takes a lot of "hustle". If someone succeeds at that, they've proven that they can do it. The notion that someone needs to meet some invisible bar of proof beyond building a successful company is - to me - yet another symptom of the damage SV has inflicted on the minds of a generation of technically inclined enterpreneurs.
Think about how many emails you get. Now imagine yourself in a position where everyone knows you invest big money on a regular basis, and imagine how many orders of magnitude more emails you'd get.
Investors trust people in their Network not to waste their time (everyone's most precious asset). It's a sane filter... You just may not empathize.
Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#148IMO You need to look into both options until you get at least (a) a letter of intent for acquisition or (b) a term sheet from a VC. If you can, get both, then consider taking the VC money if you can get a significantly higher valuation and good terms. I recall a VC interview recently where he said (paraphrasing) not accepting cold emails and requiring an introduction is a filter that proves you know how to hustle and…
Re the "know how to hustle" thing - building a successful business takes a lot of "hustle". If someone succeeds at that, they've proven that they can do it. The notion that someone needs to meet some invisible bar of proof beyond building a successful company is - to me - yet another symptom of the damage SV has inflicted on the minds of a generation of technically inclined enterpreneurs.
Which successful business are you talking about? OP's business is clearly promising, but if it needs $2M to keep going, success is clearly still ahead.
For LPs trusting a VC with their cash, successful means the company growing 10x in the next seven years. That VC's conviction that the ability to hustle is between where OP is and 10x is something you could disagree about, but I'd say it's somewhat less arbitrary than forking over $2M at just the data given.
Maybe different financing tools would allow for different definitions of success, and different guesses about what the OP needs to get there. I'd like to see someone weigh in on debt financing options, which I don't know enough about. But nobody is abusing young minds here.
Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#149I'm speaking out of complete ignorance, but if you have assured revenue and just need funding to cover operations until all the checks clear, you might try just getting a small business loan. It comes with none of the cachet of venture capital, but also none of the baggage. Just make your payments and they'll stay out of your hair.
Re: Ask HN: Sell my startup for $14M because I can't raise $2M?
#150Owning 100% of $14M is better than owning 10% of a $100M exit after 5 more years of hard work.
You'll have gone through some pretty insane fundraising rounds and extreme growth then near-collapse to pull those numbers off. Raising 2M at 14M puts the OP's stake at 87.5%. Long long way to 10%.
Not really. $14M vs $100M is an order of magnitude difference. By the time you hit $100M, there's a lot more than just dilution. There's early employees, an option pool (~30%), down rounds, advisors, etc. And, there's liquidation preferences – someone with only 10% could have a 2x liquidation preference. I'm not saying it's likely, but it's also not insane to think they'd only end up with $10M out of $100M.