[dr evil]One miiiiiiiiiiiiiiillion dollars[/dr evil]
What's the lowest offer you'd take?
21–30 of 53 posts
Re: What's the lowest offer you'd take?
#22Earlier quoted context omitted.
Er. I recommend not immediately pissing away $200K, but that's just me. If you're in your early 20's, a $200K investment could easily be $1M by your thirties. Taking a $1M lump-sum means never having to work again. That's not to say you won't work again, or won't be productive again. But I'd feel really stupid if at some later date I had to take a job, just because I pissed away my capital.
That comment was intended to be read somewhat tongue in cheek, but for the sake of argument: 1) What's the point of having money if you aren't going to spend it and have fun? I suppose you could throw a smaller party and write a big check to the Google Philanthropy...but either way money is meant to be used. 2) If you actually had the skills and personality to turn $20K from YC into $3M in three months...you've clear…
Okay, I missed the humour.
Regarding (2), though. I think making $3M in 3 months has a lot more to do with luck and hype than any inherent skill. So, obviously those numbers were pulled out of thin air. The likelihood of that happening is extremely low.
Also, having a job you enjoy is no panacea. Whenever you're working for someone else (even the customer), there are things you won't enjoy. The discipline that allows you to do these things is the same discipline that makes it possible to work at a job you don't really enjoy.
Having said that, I agree with the approach of sacrificing quality-of-life for, say 5 years in order to never have to work again. Doing this for something you mostly enjoy will allow you to put in the effort without killing yourself. Unfortunately, this can become self-perpetuating. There's no inherent good in working.
Re: What's the lowest offer you'd take?
#23We're working hard on finishing up our YC application, and we're having a lot of problems with this one: "If one wanted to buy you three months in (August 2007), what's the lowest offer you'd take?" First of all, what if we're not particularly interested in selling the company that fast? Should we just put some ridiculously high number that no one would actually pay? Also, the numbers would seem to vary significantly…
"Approaching the question?" How about just answering truthfully? What would someone have to offer, assuming nothing else about the deal? If you put some high number no one would offer, you're not really answering the question, are you? If you say you'd need 20 million, I'm going to ask: so if someone offered 19, you'd say no?
I think I've stated our question poorly. It's not that we don't want to answer truthfully, it's that we're having a hard time converting what we want into a dollar figure.
Here's what we want: We want to work on cool problems. We want to make software that solves problems. We want to make enough money to live comfortably. We want to love our work.
Hopefully, in three months, we'll have some of what we want, and be on track to get the others. Someone buying the company from us may change those things in lots of different ways, depending on the situation.
Our question is, how do we quantify those wants? It's not clear to me how to do so. One approach may be to quantify other factors that would lead to us getting what we want - such as the amount of money we'd want to start another startup.
I could just give something in the ballpark, but it wouldn't be particularly accurate. For instance, I could say that giving away the site we love to work on is worth x, but if someone asks me why not x-1 or x+1, I won't have a good answer.
Re: What's the lowest offer you'd take?
#24Earlier quoted context omitted.
Er. I recommend not immediately pissing away $200K, but that's just me. If you're in your early 20's, a $200K investment could easily be $1M by your thirties. Taking a $1M lump-sum means never having to work again. That's not to say you won't work again, or won't be productive again. But I'd feel really stupid if at some later date I had to take a job, just because I pissed away my capital.
"Taking a $1M lump-sum means never having to work again." Sorry, no.
Well, obviously, this is for some reasonable definition of have.
The numbers work for me. I'm married, and have a mortgage.
I guess I was blurring the line between being retired and semi-retired. Were I to earn such a lump sum, my daily activities would probably look the same. I just wouldn't be working for anyone else, and wouldn't have that mental burn-rate / countdown timer going.
Controlling expenses is a very powerful tool. For every after-tax dollar you save, you're saving like 2 pre-tax dollars. So, it's much more effective to save $1 than to earn an extra $1.
Here's my mental hierarchy of wealth. Each one represents a drastic change in quality of life, and options. It's somewhat logarithmic.
1) Stop living month-to-month. I.e. at the end of the month, you have enough to pay another month's expenses in the bank.
2) Pay of all debt, except mortgage.
3) Stop living year-to-year. I.e. at the end of the year, you have enough money to not work next year, possibly having to reduce your quality of life, but not to poverty.
4) Semi-retirement. If you didn't work for the next five years, you'd still have enough money to start a business at the end of the period.
5) Retirement. You can maintain your current lifestyle, or a slightly scaled-back one indefinitely. Mortgage is paid off.
6) Rich. Your kids could do (5), if you decided to fund the lazy brats.
7) FU money.
Re: What's the lowest offer you'd take?
#25Earlier quoted context omitted.
A good way to start might be the rule of thumb that startup investors typically want a 10x return on their money (for companies that succeed). If YC invests $20K in your company in return for 6% of the company, and the company sells for 3.3 million, they get 200K. Our three founders came up with a number in our own heads, then we agreed on something in the middle...which turned out to be pretty close to 3 million. As…
Honestly, this is not a hard question. We're not asking you what you think we want as a return. We're asking what you'd take. So if you think 3 million is a fantastic deal, then you haven't answered the question correctly. We're not asking what you think would be a fantastic deal, but what would be the worst deal you'd still accept. Would you really turn down 2 million for three months' work? Incidentally, we don't e…
Again, it depends on how exactly you imagine the situation. If the choice was acquisition by Google for $2 million, or probable destruction by Google in a year...certainly I would take the former.
On the other hand, if I was passionate about the product and thought there was great potential for growth over the next few months and years, I wouldn't want to walk away for anything less than a fantastic deal.
I appreciate your focus on excellent people rather than returns and dealmaking. The profitability of YC strikes me as an interesting question simply because it's an important aspect of a model that is unique and interesting in many ways.
Re: What's the lowest offer you'd take?
#26Earlier quoted context omitted.
Er. I recommend not immediately pissing away $200K, but that's just me. If you're in your early 20's, a $200K investment could easily be $1M by your thirties. Taking a $1M lump-sum means never having to work again. That's not to say you won't work again, or won't be productive again. But I'd feel really stupid if at some later date I had to take a job, just because I pissed away my capital.
"Taking a $1M lump-sum means never having to work again." Sorry, no.
It probably means never having to work again on something you don't like. Esp. if you're young when you get it.
Re: What's the lowest offer you'd take?
#27I'd want to walk away and be able to look someone in the eye and say "I'm a dot com millionaire." So with the share structure, capital gains tax (guessing), and exchange rate the number I'd pull out of my ass would be four million for the whole shot assuming no dilution.
Three months is long enough to know if I really believe in something or not. I wouldn't sell out on anything I believe in for less than this. If that money isn't on the table after three months, I can wait and put in the sweat and time to make it worth that much.
Re: What's the lowest offer you'd take?
#28I will pull a Zuckerberg and turn down 2 billion
Re: What's the lowest offer you'd take?
#29The figure you give depends on your feelings which are created from your internal and external circumstances. I immidiately asked myself the question, "What do I want?" This was my answer: $2,000,000 for property, $1,000,000 for the house (I live in Silicon Valley), $2,000,000 for traditional reinvestment, $1,000,000 to start the next company, $6,000,000 total for each partner, After three months, it depends on where…
You've just listed everything you want out of the future (financially), which is a different question. Remember, this is for a 3 month investment of time.
So, it's good that you know what you want, but if someone offered to take you halfway there, would you turn it down? What about one tenth of the way?
Remember, most businessess fail. Yes, that includes yours, and some of mine. :)
Re: What's the lowest offer you'd take?
#30Why do you have to take an offer at all? It normally takes anywhere from 1-2 years to make a site successful enough to justify selling for a gargantuan amount. In 3 months, how much growth can you get to show enough promise of future growth/monetization?
If a VC can choose to value a company at $15m, shouldn't a tech savvy acquirer be willing to pay that much instead of waiting another 2 years when the same technology might cost $75m?