Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

We need a middle class for startups

neilthanedar.com

Post reply on HN
Print view View original

201–210 of 320 posts

Re: We need a middle class for startups

#201

Post by flutas »

limedaring wrote: post #125
michaelbuckbee wrote: post #92

This post is describing a structural issue on the funding side of new ventures: - - bootstrapping is very hard - traditional credit/loans aren't structured well for the "mid" type risks of starting software businesses (not much collateral) - and on the VC side there is much less opportunity for the Unicorn 1 in 10 exits. Tackling this problem are two funds that I didn't see mentioned in either the article or the comm…

Tracy here from TinySeed, thanks for linking to our thesis! Point of clarification: we don't do profit-sharing. Instead, we are equity owners. So when a company gets to the point of success where they want to take money off the table, they can issue dividends (and TinySeed get's a pro-rata amount of those dividends). I find this is one of our most unique points and aligns the incentives of the founder with TinySeed.…

On the thesis page it makes it sound like only B2B are considered, but here you stated primarily. Is this just a mis-wording here, or is it more that the focus is B2B but you won't outright deny a B2C company, if you think they have a good idea?

Re: We need a middle class for startups

#202

Post by wuth2 »

bradgessler wrote: post #139
limedaring wrote: post #125

Earlier quoted context omitted.

Tracy here from TinySeed, thanks for linking to our thesis! Point of clarification: we don't do profit-sharing. Instead, we are equity owners. So when a company gets to the point of success where they want to take money off the table, they can issue dividends (and TinySeed get's a pro-rata amount of those dividends). I find this is one of our most unique points and aligns the incentives of the founder with TinySeed.…

You should add that you cap founder salaries at $250-$300k/year (if I remember your terms correctly) If you’re a founder looking at TinySeed, what this means is that if your business reaches a level of success you can pay yourself over $250k-$300k through your W-2, you’ll either have to cap it there or pay the rest through dividends. That said, this isn’t really a terrible setup if you plan to go down this route. The…

bradgessler, you have that completely backwards (might want to edit your post so others don't get confused). Dividend income is almost always taxed lower than w-2 income on several levels. The IRS goes after C corps for distributing dividends without a fair-wage w-2-- it triggers an automatic inquiry which, if you're not paying a fair wage, leads to an audit.

Re: We need a middle class for startups

#203

Post by stjohnswarts »

we need a middle class for western civilization

* limited terms for government offices, all of them

* limited funding and/or public funding for top X candidates

* _Heavily_ regulated lobbying and audits of said lobbying, and complete transparency of All Meetings (time, date, topic, audio recording)

* free public higher education

Only then will we get a little bit closer to fair government and healthy middle class (which is starting to dwindle in the USA)

Re: We need a middle class for startups

#204

Post by folli »

coderholic wrote: post #170
chrisweekly wrote: post #116

Earlier quoted context omitted.

Your story with IPinfo.io is profoundly compelling; have you written anything about your journey? > "let's be ambitious and serve a large market and create the best products with great people, but let's run this as a marathon and not a sprint, and let's not risk everything on a big outcome" This sounds so great.

Thanks! Yeah I have talked about it a bit - I should probably talk about it more :) https://saasclub.io/podcast/ipinfo-ben-dowling/ https://codestory.co/podcast/bonus-ben-dowling-ipinfo/ https://www.youtube.com/watch?v=r79AuXgTy-4

Probably a stupid question, but how does this work technically, how does one correlate IP addresses to geolocation?

Re: We need a middle class for startups

#205

Post by hooande »

coderholic wrote: post #171
Etheryte wrote: post #149

Earlier quoted context omitted.

Isn't what you're describing just running a regular company?

No, I actually think it's much more closely aligned with a VC business than a regular business. It's just a more "regular business" approach towards it. That is, it's still serving a large market, creating a competative advantage (which "regular businesses" rarely have), has compounding growth - it just doesn't need to rush to make it all happen in a few years in a very high risk way.

what is the competitive advantage of ipinfo.io?

Re: We need a middle class for startups

#206

Post by bspear »

coderholic wrote: post #103

Totally agree with this article. It's not just about funding methods, but also playbooks for these types of businesses, and best practices. I've bootstrapped IPinfo.io to millions in revenue and a team of over 20 - so we're squarely in the "Middle class", and there's a tension between the "bootsrapper advice" (which mostly applies to optimizing for lifestyle and eliminating any risk) and "VC backed advice" (which mos…

> Promote employee stock ownership for American Mittelstands

This is crucial. Many bootstrapped companies don't offer much stock ownership from employees. Yes, they can pay a good salary, but these employees are laying down the business brick by brick, but never see a dime of the upside. Mailchimp comes to mind. I'm sure there are others.

This basically leaves stock ownership in VC-backed startups as a way to get rich quick (albeit with low odds): https://topstartups.io/startup-salary-equity-database/

In fact, Mittelstands will probably perform even better if they can figure out how to attract the kinds of talent well-funded startups do. And from there, it'll be a virtuous cycle.

Re: We need a middle class for startups

#207

Post by hooande »

bradgessler wrote: post #114
coderholic wrote: post #103

Totally agree with this article. It's not just about funding methods, but also playbooks for these types of businesses, and best practices. I've bootstrapped IPinfo.io to millions in revenue and a team of over 20 - so we're squarely in the "Middle class", and there's a tension between the "bootsrapper advice" (which mostly applies to optimizing for lifestyle and eliminating any risk) and "VC backed advice" (which mos…

Same! I think the middle ground is somewhere between paying dividends or distributions from the revenue and most importantly, becoming comfortable with the idea and ignoring the “growth at all costs” mentality that people (and press) are so attracted to. Where does this community exist?

this community simply does not exist yet in significant form. if you build it, they will come

by "it" I mean a sustainable company that pays dividends and isn't focused on constant growth

Re: We need a middle class for startups

#208

Post by justin »

spaced-out wrote: post #119
belval wrote: post #104

Earlier quoted context omitted.

I don't have a definitive answer, but I'd venture that that's is something that can be addressed by your pitch, how high you are aiming, etc... Someone who wants to build niche business software vs "the next Facebook" is a good example. The first case has clients outlined, a good estimation of revenue, competition, etc... The second is more abstract but aims higher. Success (albeit highly unlikely) means billions in…

>The first case has clients outlined, a good estimation of revenue, competition, etc... The second is more abstract but aims higher. Success (albeit highly unlikely) means billions in revenues. It's a stereotype that startups don't have things like estimates of revenue, a clear business plan, clients, etc... A few crazy outliers get all the attention but the vast majority that get funding have a clear and convincing…

Even startups not aiming to be the next FAANG company have trouble estimating revenue, product development time, etc. It's just extremely hard to know all the unknowns when you are starting a new business, especially since it is likely that you are only an expert in one of the required fields (eng, product, marketing, sales) to bring your product to market and will have to learn everything else on the fly. Most business plans for startups are useless.

Re: We need a middle class for startups

#210

Post by bsimpson »

I studied entrepreneurship in college. They didn't know what to do with me when they realized I was planning on running a lifestyle business. Everybody else's forecasts were in the millions. I would have been happy making more than I spend.
Post reply on HN