311–320 of 398 posts
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Probably closer to 100/1, or worse - that's the gamble you (should) know you're taking if you accept venture capital. It's not for everyone, but eastdakota is right that it's not for nobody .
If it was 100/1, no VC would stay afloat, right? The math here isn't that hard to work out; it tracks the portfolio logic of the funds themselves.
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> You're arguing with economics here... No, I'm arguing against die-hard monetarists who still buy Friedman's bullshit 25 years after the Asian financial crisis and 15 years after the subprimes crisis. Japan has had more than two decade of low interests with no inflation, and the rest of the world had one decade with the same result, but as these people are cultists, they don't care about facts and they never did. In…
I appreciate the context and will research the differences you shared; this topic interests me. > This is goalpost moving. My comments have been under the context of the post, VC funding. With VCs, you often find companies spring from nowhere with a marketing blitz or infinite runway in an exclusive access phase. This is not accessible to the common person, and in my opinion stems from a modernly masked form of nepot…
But the reverse is also true. If you keep the ZLB enjoy living in an imperfect world that needs constant government intervention to deal with the constant dysfunction that such a price control generates.
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How do you know if you have a Rocket? Many (most?) VC funded companies are just appearance, no substance and it’s all very apparent. All the new AI ‘products’ for instance. So those are clearly not rockets, just blah and hype. Maybe we had rockets before, but I don’t want to lie and cheat like some of our vc invested companies did (most are gone). Never were rockets, just hype, Twitter presence and faking all around.
monthly/annual growth? To be honest, startups play on another level than most SMBs. With a SMB, you can double your growth every year for 5-10 years straight, and do very well, but not be interesting for VCs. To be interesting and relevant for VC money, you need a business that can scale to millions of users. If you can show that you're able to double growth every month (or similar short-window metrics) with an idea…
One common benchmark for startups at the $1m/year stage is T2D3 (triple, triple, double, double, double).
I'll take another position; since it might be keen to understand a little more from a different perspective. I am a person who is a non-founder startup CTO; my company does not have any venture capital funding and we have enough capital to go to market. However, certain institutions (especially US ones) give great discounts, insider incentives (such as early access to features or access to people) and so on to ventur…
Would it be possible to take ~$100k of VC funding to get the 'VC-funded' benefits without actually giving up any real control of the company?
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IIRC each time you raise a round, your chances of success go down by ~10x. Can't find a good cite offhand though.
Every time you raise a round, the outcome you're shooting for is magnified. If you're raising an A round, you're not getting acquired after your seed; you're rolling the dice on getting a much better outcome. If you're raising a B round, you've got some facsimile of product-market fit, and you've decided to take the company to the point where the only "successful" outcomes are denominated in hundreds of millions of d…
So you get a mix on those rolling the dice one more time in the hope of that next 10x, and those unable to get an exit, and unable to earn enough, but able to convince investors one more time that this round will pay off, and who will rarely pay off well for founders or early investors, if at all.
I've both been in companies like that and worked for a VC analysing round data to avoid putting money in companies like that...
In a company like that, I once got 10k for my original 25% stake when the company was finally acquired... I left after the 4th round or so, and there were at least a few more after I left (I stopped.paying attention. The company was acquired for only 40% above the size of the A round.
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According to Statista there were 16,464 VC deals signed in 2022. There were 181 IPOs in that year. The most IPOs in a year ever is 1,035. Obviously the two aren't directly comparable, but the point I'm getting at is that an IPO exit for any company is really unusual. If you found a company and take on VC funding your exit event is much more likely to be getting acquired if you don't fail. It does happen, and deserved…
Most businesses fail. My intuition is that rate of failure in software, where its much more winner take all, would be higher than brick and motor businesses, which constantly fail. So really, this doesn't seem surprising.
That statement needs qualifiers. Most companies that need infra to serve customers need money to build that before they can start investing with money they make. Hard to see how Google or Amazon could have come about without VC funding
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Which is why this place is just Reddit with more flowery language and an illusion of expertise
I really don't agree. This place is filled with some of the most intelligent subject matter experts in the world.
Every other subject? It's a lot of cherry picked data and political dog whistling with an occasional expert
People running startups shouldn't be so proud of raising capital; it's silly child's play. Instead, you should focus on your craft and your product. The entire concept of corporations and shareholder capitalism is what is wrong with human civilization. It destroys the environment and reduces harmony in society. And mindlessly taking in capital, whether VC-funded or not, creates overhead and bloat, along with so-calle…
We should commend companies that resist artificially expanding the scope of their products. Sometimes a product is done. I recall Antoine de Saint-Exupéry's aphorism that "perfection is finally attained not when there is no longer anything to add, but when there is no longer anything to take away".
All your examples are of single-product companies. They should expand their product portfolio instead.