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

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

#341

Post by reducesuffering »

jrm4 wrote: post #304
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…

"It is true that playing the lottery doesn't work out for everyone, but it worked really well for us!"

It's sad that are multiple retorts about "lottery winners." Apparently, just on HN, we have about 25 lottery winners. Quite the coincidence!

(cloudflare, shopify, databricks, coinbase, stripe, openai, freshworks, gitlab, dropbox, hashicorp, amplitude, vercel, plaid, hubspot, quip, notion, twilio, etc)

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

#342

Post by sk5t »

8n4vidtmkvmk wrote: post #301
sk5t wrote: post #290

Earlier quoted context omitted.

Yep. I did seven years of Slog, and quitting was very freeing, after years of angst and disappointment.

What did you do after? If I give up on this, I'm not sure I'd want to do it again. I don't know what I'd do differently. Building an app and all the non-programming junk that goes into running a business is just a lot. I could rise the corporate ladder. I'd be fine but never rich.

Engineering at a much more mature company. It won’t make me rich (especially considering the stock’s dreary trajectory since 2021) but it’s a lot less depressing nevertheless.

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

#345

Post by mvkel »

onion2k wrote: post #68
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…

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…

Sure, and there were 21,421 M&A deals made in 2022.

IPOs are just one of the positive outcomes, certainly the rarest.

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

#346

Post by Aeolun »

onion2k wrote: post #68
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…

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…

I think the point is that if you go in with those options as the valid outcomes you won’t be surprised.

Not that you necessarily have a very high chance of the last two.

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

#347

Post by tptacek »

wolf550e wrote: post #263
tptacek wrote: post #194

Earlier quoted context omitted.

What tripped me up with real estate agents is how socially skillful they are. It's a survival skill, so as a cohort they're all anomalously good at building rapport and, from there, trust. If you don't know what you're doing, and what they're doing, and you rely on them as the domain experts, there's a pretty decent chance you're not going to be happy with the outcome. Their incentives aren't perfectly aligned with y…

Can you please share a link about understanding "what's going on and learn to read the room"? For real-estate and venture capital.

I just mean, a real estate agent wants the transaction to happen and shifts in price that make a big difference to you make almost no difference to them, and a VC partner is going to fund one company in a whole year, is mostly concerned about missing out on the one company that 15x's, and will take as much optionality as is on offer.

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

#348

Post by ajkjk »

8n4vidtmkvmk wrote: post #299
ajkjk wrote: post #249

Earlier quoted context omitted.

Quit, do something else.

We could sell, but like $50K for 9 years of work is so sad.

You only, well, live once. Will you be happier staying or leaving? There is a lot more to life than grinding away at a project.

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

#349

Post by ajkjk »

8n4vidtmkvmk wrote: post #301
sk5t wrote: post #290

Earlier quoted context omitted.

Yep. I did seven years of Slog, and quitting was very freeing, after years of angst and disappointment.

What did you do after? If I give up on this, I'm not sure I'd want to do it again. I don't know what I'd do differently. Building an app and all the non-programming junk that goes into running a business is just a lot. I could rise the corporate ladder. I'd be fine but never rich.

Working at a corporation and making a reasonable engineer's salary will make you basically rich. Not like rule-the-world rich, but rich enough to do anything you ever wanted, which I think is pretty much as rich as anybody needs to be.

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

#350

Post by jrm4 »

reducesuffering wrote: post #341
jrm4 wrote: post #304

Earlier quoted context omitted.

"It is true that playing the lottery doesn't work out for everyone, but it worked really well for us!"

It's sad that are multiple retorts about "lottery winners." Apparently, just on HN, we have about 25 lottery winners. Quite the coincidence! (cloudflare, shopify, databricks, coinbase, stripe, openai, freshworks, gitlab, dropbox, hashicorp, amplitude, vercel, plaid, hubspot, quip, notion, twilio, etc)

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