Airbnb, My $1B Lesson • Hacker News Board

Re: Airbnb, My $1B Lesson

#41

Post by napoleond » Thu, Jul 23, 2015, 4:48 AM UTC

Let me get this straight: in June 2008, Airbnb got intro'd to a bunch of investors, who all said no [1]. In September of 2008, Airbnb had a $250k round on the table that valued them at 2.5M[2]. And then, also in September 2008 (before YC usually does interviews) they rejected that offer for YC, who ended up giving them $20k[3], with a valuation presumably around $250k?? (Although Brian Chesky says that didn't happen until November, it sounds like they got some kind of verbal confirmation earlier?)

The timeline is weird.

1. https://medium.com/@bchesky/7-rejections-7d894cbaa084

2. https://arenavc.com/2015/07/airbnb-my-1-billion-lesson/

3. http://www.quora.com/How-much-money-did-Airbnb-raise-What-is...

Re: Airbnb, My $1B Lesson

#42

Post by staunch » Thu, Jul 23, 2015, 4:52 AM UTC

beambot wrote: post #21

If it's bad form for a VC to break a handshake deal, it's equally-bad for a startup too... no? Doesn't that reflect poorly upon the founders? It's so important that YC went through the effort to codify the process: http://www.ycombinator.com/handshake/

They probably shook hands after a meeting, as one always does. That is not a "handshake deal". Airbnb probably had similarly positive meetings with dozens of investors. All of them probably talked about doing the deal soon.

He's known for being bold and writing checks on a first meeting. Why didn't he write a check to Airbnb after months of haggling? YC, or any other investor, was free to come along and close the deal at any moment. The way an investor claims a deal is with their checkbook (or a signed term sheet). He learned his lesson and realizes his mistake. Airbnb did nothing wrong.

Re: Airbnb, My $1B Lesson

#43

Post by ARolek » Thu, Jul 23, 2015, 4:59 AM UTC

Time kills all deals.

Re: Airbnb, My $1B Lesson

#44

Post by late2part » Thu, Jul 23, 2015, 5:01 AM UTC

Hey Paige - If I negotiate a potential financing with Arena, and it doesn't work out, will you take all of my emails and publish them as well?

Re: Airbnb, My $1B Lesson

#45

Post by [deleted] » Thu, Jul 23, 2015, 5:01 AM UTC

napoleond wrote: post #41

Let me get this straight: in June 2008, Airbnb got intro'd to a bunch of investors, who all said no [1]. In September of 2008, Airbnb had a $250k round on the table that valued them at 2.5M[2]. And then, also in September 2008 (before YC usually does interviews) they rejected that offer for YC, who ended up giving them $20k[3], with a valuation presumably around $250k?? (Although Brian Chesky says that didn't happen…

[deleted]

Re: Airbnb, My $1B Lesson

#46

Post by [deleted] » Thu, Jul 23, 2015, 5:01 AM UTC

[deleted]

Re: Airbnb, My $1B Lesson

#47

Post by cplease » Thu, Jul 23, 2015, 5:01 AM UTC

mangeletti wrote: post #24

shasta wrote: post #18

Earlier quoted context omitted.

Not all contracts... https://en.wikipedia.org/wiki/Statute_of_frauds

Wow, thanks for the link. That's really interesting. Most of those seemed like pretty obvious safety stops, except for the $500 in goods maximum. That one sort of renders verbal contracts useless in nearly all cases, unless I'm misunderstanding.

You are misunderstanding. The $500 limit is specifically for "goods". Not services, for instance.

Re: Airbnb, My $1B Lesson

#48

Post by andrewstuart » Thu, Jul 23, 2015, 5:02 AM UTC

hhandoko wrote: post #32

pjy04 wrote: post #7

What bugs me is that the founders went back on the deal that was agreed upon in person.

I hear you. I get that a deal isn't final until it's in writing (i.e. signed), but whatever happened to integrity?

All a matter of perspective.

My basic understanding is that deals are complete when signed off. Where's the lack of integrity in that?

Re: Airbnb, My $1B Lesson

#49

Post by carrotleads » Thu, Jul 23, 2015, 5:03 AM UTC

mentat wrote: post #25

andrewstuart wrote: post #20

Earlier quoted context omitted.

You could equally say: "Docs were finished, a "closing dinner" was had, a handshake was made on the deal, and then the investor didn't sign"

And we would be just as critical of that investor.

Are we.. I am not so sure..

Re: Airbnb, My $1B Lesson

#50

Post by carrotleads » Thu, Jul 23, 2015, 5:08 AM UTC

andrewstuart wrote: post #8

pjy04 wrote: post #7

What bugs me is that the founders went back on the deal that was agreed upon in person.

A deal ain't a deal till its signed off. I make deals and negotiate all the time and I've negotiated thousands of times. It's a very good sign when you have a verbal agreement but you're a fool if you think that's a finished deal. It's the quick and the dead - if people are serious about a deal then they need to move quickly, wrap it up and sign it. If you are selling something (yourself, your company, shares in your…

>> if people are serious about a deal then they need to move quickly, wrap it up and sign it.

exactly, you see this with recruitment.. when a company meets the right candidate they move very fast...

Anytime I did interviews, I had a 24 hr deadline for me to mentally strike out a option. Everytime I got a job, I was contacted almost within an 1-2 hr of doing the interview.

Any delays means they other party has other good options, same applies IMO here as well..

So in this case unless they sign on the dotted line pronto and give a cheque, things are still up in the air