Should Entrepreneurs Bet It All On The Billion Dollar Exit, Or Cash Out Small?
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Re: Should Entrepreneurs Bet It All On The Billion Dollar Exit, Or Cash Out Small?
#2Would be interested to hear how many funded entrepreneurs on HN were able to cash out some shares at any point in their company's history (similar to what the Foursquare guys did)...
Re: Should Entrepreneurs Bet It All On The Billion Dollar Exit, Or Cash Out Small?
#3I never really understood this debate... as if all companies should go big, or all companies should stay small/medium. Every business is different. Businesses have varying amounts of potential for growth, varying numbers of possible revenue streams, and even varying numbers of directions in which to pivot should things hit a wall.
If you're selling people hands-on classes in underwater basket-weaving, it's probably not a good idea to make all your classes free so you can chase VC money. On the flip side, if you've created a social network that's on track to become the biggest website ever, it's clearly unwise to sacrifice that massive potential by cashing out early. One-size-fits-all arguments ("All companies should go for the gold!") don't make any sense, and are probably issued by people who have a direct incentive for their arguments to become reality.
Re: Should Entrepreneurs Bet It All On The Billion Dollar Exit, Or Cash Out Small?
#4Would be interested to hear how many funded entrepreneurs on HN were able to cash out some shares at any point in their company's history (similar to what the Foursquare guys did)...
Rather, would be interested to hear from entrepreneurs who cashed out and then regretted it.
Re: Should Entrepreneurs Bet It All On The Billion Dollar Exit, Or Cash Out Small?
#5I don't even understand the debate:
Your lifespan, healthspan, lifetime happiness and ability to run a company will only go up once you cash out for 4-10 million or more. You've literally solved the money problem at that point.
Why would you risk that on a vanity billion dollar exit?
Re: Should Entrepreneurs Bet It All On The Billion Dollar Exit, Or Cash Out Small?
#6Would be interested to hear how many funded entrepreneurs on HN were able to cash out some shares at any point in their company's history (similar to what the Foursquare guys did)...
Rather, would be interested to hear from entrepreneurs who cashed out and then regretted it.
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Re: Should Entrepreneurs Bet It All On The Billion Dollar Exit, Or Cash Out Small?
#7I don't even understand the debate: Your lifespan, healthspan, lifetime happiness and ability to run a company will only go up once you cash out for 4-10 million or more. You've literally solved the money problem at that point. Why would you risk that on a vanity billion dollar exit?
Glory!
Re: Should Entrepreneurs Bet It All On The Billion Dollar Exit, Or Cash Out Small?
#8I don't even understand the debate: Your lifespan, healthspan, lifetime happiness and ability to run a company will only go up once you cash out for 4-10 million or more. You've literally solved the money problem at that point. Why would you risk that on a vanity billion dollar exit?
Well, a billion dollar company might enable you to make a 'bigger' difference. You help make your employees wealthy (Google's millionaire emplyees), you help shape whatever sector you're in (hopefully for the better). You create value for you shareholders. Everyone's a winner, theoretically.
Re: Should Entrepreneurs Bet It All On The Billion Dollar Exit, Or Cash Out Small?
#9I never really understood this debate... as if all companies should go big, or all companies should stay small/medium. Every business is different. Businesses have varying amounts of potential for growth, varying numbers of possible revenue streams, and even varying numbers of directions in which to pivot should things hit a wall. If you're selling people hands-on classes in underwater basket-weaving, it's probably n…
The debate is for people/companies who have a choice-- obviously you're right about the fact that there's no debate where there is no choice. Mint sold for $150m, but perhaps could've aimed bigger. Blogger sold pretty early-- perhaps they could've been/beaten WordPress. Google famously tried to sell for $1m to Excite. LOTS of companies who sell early have an opportunity to aim bigger.
I think partial cash-out Series B rounds are a good development which allows founders to have their cake and eat it too. Aaron Patzer probably could've raised a big Series B, pocketed a few million for himself and retained a fairly massive chunk of ownership.
Re: Should Entrepreneurs Bet It All On The Billion Dollar Exit, Or Cash Out Small?
#10I don't even understand the debate: Your lifespan, healthspan, lifetime happiness and ability to run a company will only go up once you cash out for 4-10 million or more. You've literally solved the money problem at that point. Why would you risk that on a vanity billion dollar exit?
Well, a billion dollar company might enable you to make a 'bigger' difference. You help make your employees wealthy (Google's millionaire emplyees), you help shape whatever sector you're in (hopefully for the better). You create value for you shareholders. Everyone's a winner, theoretically.
Your argument is only true for people who have only one business idea. If you have a wealth of ideas, you can execute one and sell at a point that gets security for your self and your family, then execute another and aim bigger, but with your downside risk eliminated.