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

Don't Take VC Funding – It Will Destroy Your Company

eidel.io

Post reply on HN
Print view View original

321–330 of 398 posts

Re: Don't Take VC Funding – It Will Destroy Your Company

#321

Post by ilrwbwrkhv »

anonzzzies wrote: post #181
yowlingcat wrote: post #119

Earlier quoted context omitted.

> No idea why I want all this misery of competing, stress, exposure, running all the time etc etc. Have you ever run a business before? The belief that you can build a business without dealing with competition is a myth. Having a successful company requires picking your poison. Non-VC is a different poison than VC, and I do agree that it is a much better approach for far more many businesses. But make no mistake, hav…

> Have you ever run a business before? Only 30 years. You? Not mean to be as snarky, but this US all or nothing stuff is getting on my nerves just a bit. I came from a simple background, but in a country with free education, so I got a degree in uni, opened a company in high school, all without too much risk. Didn’t need to work myself to death, didn’t have much stress, didn’t need VCs and make more than most here wh…

I agree with you completely. Due to the whole business media world spreading these lies, people think business is all us vs them and competition is for losers.

You can make very good income ($4 million profits / annum) in my case while coexisting with competition and having lots of fun.

Re: Don't Take VC Funding – It Will Destroy Your Company

#322

Post by netcruiser »

klysm wrote: post #87
allenleee wrote: post #19

VC money is the rocket fuel. If you're not going to build a rocket, then don't take resources. There are plenty of tech startups generating over $100 million in revenue that didn't require that fuel.

I’ve seen several people say that in this thread - who is the original source of that analogy?

Mr Wonderful?

Re: Don't Take VC Funding – It Will Destroy Your Company

#323

Post by uLogMicheal »

imtringued wrote: post #312
uLogMicheal wrote: post #288

Earlier quoted context omitted.

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…

I am personally of the opinion that the central bank is irrelevant. The only factor relating to central banks that has any relevance is that they issue cash with a price control aka the zero lower bound on interest. This results in the usual problems with minimum price controls. There will be an oversupply of the "product" in question. Because the ZLB applies to the short term interest ratethere will be an oversupply…

I understood how one-sided discovery is problematic in paper-asset markets. I think this is a big reason we are seeing efforts to shut down decentralized exchange. Decentralized exchange prohibits censored price discovery. Orders must execute in public by nature of the systems. Now from what I understand, if the order is big enough to cause major market impact it goes to dark pools, or other frontrunning/delay measures are executed in private via contractual negotiations. Interesting that this is also similar in borrowing markets, thanks for that context.

Re: Don't Take VC Funding – It Will Destroy Your Company

#324

Post by limandoc »

This is a great example of "pick the right apple". Many VCs and investors can be control freaks, however if your company is profitable enough then you can demand whatever you want from investors.

Just as I would not suggest to start a relationship before healing, same principle applies here: don't ask for money while a company is on low (financial) morale. But once the company is (financially) confident - all VCs and investors will come along. And that's when you can set a tone. For example by not giving up baord seats and restricting what investor can do. Simply offer them 10x return + dividents and nothing more. This capital will be enough to further boost your company.

Re: Don't Take VC Funding – It Will Destroy Your Company

#325

Post by juancn »

Yes, mostly... sometimes a profitable company needs to grow faster than it can organically to capture enough of the market and you need outside investment. Maybe taking debt is the right idea, sometimes it's not.

It's not common and it's a great place to be in (it's easier to price your company, and to bargain).

Re: Don't Take VC Funding – It Will Destroy Your Company

#326

Post by littlestymaar »

imtringued wrote: post #312
uLogMicheal wrote: post #288

Earlier quoted context omitted.

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…

I am personally of the opinion that the central bank is irrelevant. The only factor relating to central banks that has any relevance is that they issue cash with a price control aka the zero lower bound on interest. This results in the usual problems with minimum price controls. There will be an oversupply of the "product" in question. Because the ZLB applies to the short term interest ratethere will be an oversupply…

> I am personally of the opinion that the central bank is irrelevant

The economic history of the US (which was one of the last industrial power to addopt a central bank) is against you on this one, especially the period between ACW and the creation of the Fed in 1913.

The purpose of central bank isn't to set up price control on money (which it doesn't, btw) it's to make sure that commercial bank don't have liquidity issues.

Re: Don't Take VC Funding – It Will Destroy Your Company

#327

Post by spacebanana7 »

epolanski wrote: post #292
eastdakota wrote: post #22

You’re so right! It was an absolute disaster for us. Never do it!!!!! Kidding aside, it is true that raising money from VCs puts you on a very defined path with really only three potential outcomes: 1) failure, 2) sell to acquirer, or 3) go public. There are a small handful of exceptions, mostly for companies that throw off massive amounts of cash, but, realistically, those are the outcomes. If you don’t like any of…

> You’re so right! It was an absolute disaster for us. Never do it!!!!! You're still unprofitable after 13 years though, aren't you? Growth is prompted by skyrocketing sales costs. Does any VC funded company ever ends up not losing money?

Facebook / Meta

Re: Don't Take VC Funding – It Will Destroy Your Company

#328

Post by dinvlad »

Eumenes wrote: post #126

One annoyance I have with VC funded startups is how they all try and use the same playbook. Founders are generally inexperienced. Likely good ICs, very good talkers, but not capable of holistically building a company from the ground up. They hire the same roles, in the same order. So many small startups will have over embellished leaders, who are 'head of' or 'director of' something, with 1-2 or sometime zero direct…

Or it may also happen the opposite way, when CEOs try to achieve too much with too little all in the name of staying “lean” so they could stay afloat, and working their early employees into the ground until they’re dead and fresh meat replaces them.

Re: Don't Take VC Funding – It Will Destroy Your Company

#329

Post by dinvlad »

laurex wrote: post #262
onion2k wrote: post #68

Earlier quoted context omitted.

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…

Beyond the issues surrounding the failure rate, it's worth thinking about the extra work to keep satisfying investors, the likelihood that you'll lose at least some measure of control, and fundamentally the ethics of extraction that VC models necessitate, meaning you will need growth even if it's not good for the company or the customers in the long term, and that kind of growth often also means that there's an impet…

This very much applies to Cloudflare, otherwise it wouldn’t tolerate hate groups hosted in the name of “freedom of speech” and all that PR bs. Ethics not only takes the back seat, it disappears without a trace.

And let’s not forget the ethics of continually selling a large chunk of their shares in the company they publicly believe will continue growing and is profitable.

Post reply on HN