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Meaningful exits for founders (2016)

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Re: Meaningful exits for founders (2016)

#61

Post by chubot »

ilrwbwrkhv wrote: post #21
clark-kent wrote: post #11

Earlier quoted context omitted.

Thats impressive. Do you mind sharing some tips that helped you scale your bootstrapped business to 4million profit?

I am not a good writer that's why I do not do blogs and stuff but I will try: 2 fundamental ideas: Distribution & Supply Chains Distribution: You need to secure distribution before your company can grow. Which means essentially a lead list or people you can reach in bulk or manually by walking down the street. You need at least 500+ such connections. The goal of the initial distribution is iterating on your core valu…

Not to detract from an interesting post, but the last point about programming languages is confusing, and seems to give little information.

Use expressive, untyped Ruby or inexpressive, strongly typed Go? Or SBCL ?

Most people would put Ruby and Go on pretty opposite sides of the spectrum.

Maybe you prototyped in SBCL when you needed extreme flexibility/iteration speed at first, and then switched to Go when maintenance became more important? That's a fairly common evolution at big companies.

Re: Meaningful exits for founders (2016)

#62

Post by user_named »

bsuvc wrote: post #8

TLDR: dilution is a thing and investor incentives are not always aligned with founder, when it comes to early exit opportunities. --- But... I don't think there are really a lot of opportunities to exit at $38m in the early stages of a startup, even if your valuation says it is possible on paper. There just isn't much of a market for companies at that stage of growth. Imo, the more likely scenario is for a startup to…

In the second scenario, employees with equity are also screwed. Just led one of those zombie startups. It's selfish and incompetent as hell to take investment, hand out shares, and then steer into a low growth lifestyle business whose share will never be worth anything.

Re: Meaningful exits for founders (2016)

#63

Post by carom »

graiz wrote: post #15

The links referenced in the article didn't work, this was from 2016. https://medium.com/jme-venture-capital/meaningful-vc-exits-2... I couldn't find the capshare post but there was a similar slide deck from capshare: https://www.slideshare.net/IanBeckett3/analysing-5000-startu...

http://web.archive.org/web/20190412095003/https://www.capsha...

Re: Meaningful exits for founders (2016)

#64

Post by Reviving1514 »

tptacek wrote: post #57
dabeeeenster wrote: post #37

Earlier quoted context omitted.

What evidence do you have that it is "staightforward"? If it was, everyone would do it.

I think you've misconstrued the word "straightforward" to mean "easy". They're subtly different concepts.

What's the playbook?

Re: Meaningful exits for founders (2016)

#65

Post by d_t_w »

k1w1 wrote: post #30
randmeerkat wrote: post #10

Earlier quoted context omitted.

> Even when I was getting started, I read a ton on VC funded businesses but not a lot on non VC funded businesses. Any suggested reading for the non VC funded business?

We have been able to bootstrap Aha! from zero to over $100 million in annual revenue without any external funding. We have written about some of our experiences at https://www.bootstrap.company/ and https://www.aha.io/blog/collection/bootstrap-movement .

I run a bootstrapped software company, not at the $100M scale.

My interest piqued I clicked, had a look at Aha! (having never heard of it before) and immediately thought - hey I could use this. You got me, ka pai, haha.

Any insight on how to navigate inflexion points that seemingly require more capital that cashflow allows? Stay true and spend less? Number 8 wire might not be the same solution today as it once was, that's my worry.

Re: Meaningful exits for founders (2016)

#66

Post by mdorazio »

dublin wrote: post #49
santiagobasulto wrote: post #27

This is a great post, but I think it fails to see one important point... > a founder selling at the Series D price of $210M, would make the same amount of money at exit as they would have if they’d sold for $38M after having only raised a seed round (...) Lifetimes of work and risk lie between a Seed round and a Series D round. And, despite increasing the value of the underlying business 7x, the dollars at exit for t…

I'd take a solid cash cow producing producing value for customers at an A-round size over growing it to D-round size any day. Maybe because I've just been through enough of this crap to know that yes, you want to make money with your startup, but there are some things no amount of money can compensate you for... And a company spinning off a fair amount of cash can be grown surprisingly rapidly organically, though it…

In the first scenario, how do you plan to return the A-round investor money at a multiple and timeframe they'll be happy with for their fund?

Re: Meaningful exits for founders (2016)

#67

Post by Scoundreller »

KaiserPro wrote: post #7

One thing that would be helpful to add to this post: 1) the chances of your company making it to series B 2) the chances of you as a founder actually making any money. Much of the startup "legend" of massive exits, everyone making lots of money, is exactly that: legend. VCs batch startups together because >90% will fail. Of those that do make it out of the incubator in any meaningful way, you can expect another 80% m…

> Say you get aquihired, you're not going to get much of a share payout, if at all.

But often you turn your risky "stock investor" income into stable "bond investor" income.

If you're ever able to convert a stock into a bond with the same net return, do it! I know I am with my savings these days.

Re: Meaningful exits for founders (2016)

#68

Post by nathan11 »

ilrwbwrkhv wrote: post #6

It's crazy that a series d exit would net a founder 7 million and yet my bootstrapped business returned a 4 million profit for me last tax year. I think people need to learn more about how to scale a bootstrapped business. Even when I was getting started, I read a ton on VC funded businesses but not a lot on non VC funded businesses. I think there is tremendous amount of money to be made in bootstrapping as well. I t…

I'm really curious about your story. Two years ago your posts were seeking business tips because your efforts weren't working. One year ago you were looking for a way out of web dev. What did your path look like between then and now?

Re: Meaningful exits for founders (2016)

#69

Post by tptacek »

Reviving1514 wrote: post #64
tptacek wrote: post #57

Earlier quoted context omitted.

I think you've misconstrued the word "straightforward" to mean "easy". They're subtly different concepts.

What's the playbook?

Establish yourself. Specialize. Hire someone to increase delivery capacity. Sales capacity improves; ratchet delivery up with it it (get better at recruiting). Raise rates continuously and aggressively. Give it 2-3 years (once you've got your sea legs).

Be good at what you're doing and steer clear of commoditized work. You can't scale up a generic IT consultancy this way. Or maybe you can! I've never tried.

Re: Meaningful exits for founders (2016)

#70

Post by onetimeusename »

tptacek wrote: post #69
Reviving1514 wrote: post #64

Earlier quoted context omitted.

What's the playbook?

Establish yourself. Specialize. Hire someone to increase delivery capacity. Sales capacity improves; ratchet delivery up with it it (get better at recruiting). Raise rates continuously and aggressively. Give it 2-3 years (once you've got your sea legs). Be good at what you're doing and steer clear of commoditized work. You can't scale up a generic IT consultancy this way. Or maybe you can! I've never tried.

>steer clear of commoditized work

can you give more details about this from your own perspective? What does commoditized work mean to you and what should one assume about IT consultancies that tend to dabble in this kind of work? What are the problems with it in your opinion? Is this work even avoidable?

I have my own thoughts on this I just don't want to bias your response.

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