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Startups Rejecting Venture Capital

nytimes.com

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Re: Startups Rejecting Venture Capital

#101

Post by danielcarver »

sturgill wrote: post #46
jchrisa wrote: post #38

Earlier quoted context omitted.

Free healthcare, free college, and a UBI would go a long way toward making starting a company realistic for more people.

Paid for by?... I distrust free anything. VCs aren’t free money; healthcare is paid for by someone; professors have a salary even if tuition is waived; UBI requires cash to materialize from someone’s efforts... Further removing people from the most important parts of life and entrusting those to a benevolent central authority is a risk I’d personally _not_ take. The lessons I learned from the most recent US president…

UBI needs to be furloughed. UBI aka just a scheme to keep the money flowing from the prole’s wallet into altman’s pocket. Universal basic EQUITY is a different thing. But he’s not offering that.

Re: Startups Rejecting Venture Capital

#102

Post by ti3 »

hsk0823 wrote: post #79
mr_puzzled wrote: post #9

Reposting my question : So let's stay I start a startup, grow and manage to take it public, what happens next? Is the company expected to keep growing indefinitely? What happens if growth is stagnant, but the company is profitable? I also hear about the mid-life and late stage of companies. Can you explain what these terms mean and how being in these stages affects the company? Are there any good examples of publicly…

Lots of good questions. Maybe a primer on the relationship between a VC and a founder would be helpful. Say you are a founder, you've got a killer idea, you think you can change the world with this idea but you need capital to bring it to life. Say you can demonstrate on a small scale that your idea does work, you have analysis that the market will support your idea, but you need money again to make it a reality. VCs…

The VC model is surely older than 'relatively new' and older than industrial companies of the 1900s.

One example of the VC model has been around as late as the early/mid 1800s (or perhaps as early as 1600-1700s) in a different industry.

Look up whaling ventures.

Probably multiple other, older examples as well.

Re: Startups Rejecting Venture Capital

#103

Post by woolvalley »

billconan wrote: post #80
hamandcheese wrote: post #53

Earlier quoted context omitted.

This is assuming one can get hired by a FAANG, which is not true for many.

I’m about to join a startup. I just want to do meaningful work and learn new things. I view it as a learning experience. I am so fed up with corporation life. I don’t see a way out other than joining a startup or starting my own. I don’t want to deal with project managers and fill their spreadsheets anymore. The most valuable thing I have is the remaining time I have in this life. Not the number in my bank account.

I work at a big tech co. I almost never fill out any spreadsheet, use JIRA, use a ticketing system that strongly, worry about 'user stories', have 'hurry up and wait' deadlines and so on.

Maybe go to another big co?

Re: Startups Rejecting Venture Capital

#104

Post by padobson »

ergothus wrote: post #33

As an outsider, I find myself disappointed everytime a company goes public, and VCs seem to be (1) a stepping stone to that and (2) motivated by the same concerns. As a consumer, I find that the shareholders never have my interests at heart, not even indirectly (everyone wants to make money, but a private company seems more likely to decide they make money by actually providing me value). This feels like a massive fa…

I think what you're describing is really a part of the decision making process by founders and initial investors who are taking the company public or shopping equity to VC.

The default mode of a company is to increase shareholder wealth, but a company that clearly communicates to potential investors and the market as a whole that they have a different metric of shareholder value (e.g. social conscience, environmental concerns, customer experience) can still be successful in taking a company public or raising funds from VCs, they'll just be selling equity to a different, if overlapping, group of investors.

Companies that want to do good and don't think through how going public or taking investment will change the incentives on which the company operates are destined to end up in the default mode.

As always, try to put both your consumer and investment dollars in companies that understand that.

Re: Startups Rejecting Venture Capital

#105

Post by billconan »

x220 wrote: post #93
billconan wrote: post #80

Earlier quoted context omitted.

I’m about to join a startup. I just want to do meaningful work and learn new things. I view it as a learning experience. I am so fed up with corporation life. I don’t see a way out other than joining a startup or starting my own. I don’t want to deal with project managers and fill their spreadsheets anymore. The most valuable thing I have is the remaining time I have in this life. Not the number in my bank account.

>The most valuable thing I have is the remaining time I have in this life Then why work for a startup? Most will demand a huge amount of your time compared to other jobs. Why not pick a job which demands a sane amount of your time and spend your free time on relationships and hobbies?

the startup is in robotics, highly aligned with my interests.

Re: Startups Rejecting Venture Capital

#106

Post by dunpeal »

eanzenberg wrote: post #94
hamandcheese wrote: post #53

Earlier quoted context omitted.

This is assuming one can get hired by a FAANG, which is not true for many.

Conversely, this assumes one can get hired at a startup with a high position and equity to match fang comp, which is not true for many.

It's not true for almost anyone.

Conversely, if you can get hired to a unicorn in a position that's senior enough to have any hope of coming anywhere near top tech pay, then you are likely talented enough to work at top tech instead.

Re: Startups Rejecting Venture Capital

#107

Post by woolvalley »

mikepurvis wrote: post #43
IMTDb wrote: post #27

Earlier quoted context omitted.

I agree with your statement, but only if you consider that employees have a significant downside of working at a startup that goes under. Usually they are able to jump ship sooner than the founder and don't loose any personal investment in the process they get more responsibilities and more independence which in turn can get them to higher salaries faster. Employees at startup usually get paid a bit less than "market…

I would agree with all of this. I'm a first employee and I have had a huge amount of influence, responsibility, and flexibility over the years— I could easily walk to multiple other opportunities for 1.5-2x salary at this point, and having the option to do that is actually worth more to me than the cash gained from actually doing it. The career growth that has made this possible wouldn't have happened working at BigC…

As some counter ancedata, I worked at a relatively successful startup for several years and I ended up as a sr eng in big co anyway after the experience. Startup options ended up being effectively zero.

I should of hopped to big co sooner instead, I would of been significantly ahead of my life's savings goals if I did, and possibly would of bought my house at a far cheaper price because I had the money to pay for the down payment.

Re: Startups Rejecting Venture Capital

#108

Post by x220 »

billconan wrote: post #105
x220 wrote: post #93

Earlier quoted context omitted.

>The most valuable thing I have is the remaining time I have in this life Then why work for a startup? Most will demand a huge amount of your time compared to other jobs. Why not pick a job which demands a sane amount of your time and spend your free time on relationships and hobbies?

the startup is in robotics, highly aligned with my interests.

All the startup employees I've talked to work 80 hours a week. Why is robots so important to you that you're willing to accomplish absolutely nothing in at least a few of the important areas of your life such as health and fitness, friendships, romantic relationships, extraneous interests, relaxation, or family?

Re: Startups Rejecting Venture Capital

#109

Post by billconan »

hsk0823 wrote: post #91
billconan wrote: post #80

Earlier quoted context omitted.

I’m about to join a startup. I just want to do meaningful work and learn new things. I view it as a learning experience. I am so fed up with corporation life. I don’t see a way out other than joining a startup or starting my own. I don’t want to deal with project managers and fill their spreadsheets anymore. The most valuable thing I have is the remaining time I have in this life. Not the number in my bank account.

Careful what you wish for, startups have people who will wear as many different hats as required to make it work. Corporate life may have had a really well defined job role, that may not be true in any startup you join.

I think I'm very entrepreneurial. "wear as many different hats as required to make it work", this is basically what I do for my side projects. I write both the web frontend (vue) and backend (in c++), do devops, content marketing, whereas my day job is device driver development.

Re: Startups Rejecting Venture Capital

#110

Post by pjungwir »

eis wrote: post #8

VCs win if enough of their bets make it big enough to offset the ones that go under. Naturally the big hits are few and the ones that fail are numerous. That means the big hits need to be huge and the failures need to have a certain cap. The latter also means you can't run a company for 10 years in slowmo until they get profitable. And the big hits need to be huge which means they need to take over a nice chunk of a…

The original story of getting rich off employee equity seems to go back to Netscape, but reading The New New Thing by Michael Lewis, I was struck by how abnormal that situation was. Jim Clark hated the VCs, identified as an engineer, seemed happy to share his winnings with everyone, and had the leverage to dictate VC terms. That story shaped tech for a while, e.g. Google bragged about how even their cooks got rich, but now 24 years after the IPO I think things have largely gone "back to normal", with investors and founders giving away less. The story's momentum still draws hopeful employees, but people are becoming more skeptical, too. Plus not every company is a Netscape or Google. . . .
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