> Any guaranteed return above bank interest rate is appealing for investors. Guaranteed return of 50%/year is an amazing investment opportunity.
Illiterate startup founder:
> You would think so, but no. ... Knowing that many of those investments will be worthless, they want to maximize the number of shots they get towards a billion dollar company.
If the 50%/year return is guaranteed as the commenter plainly states, then they know for a fact it won't be worthless. VCs would love a truly guaranteed 50% return. Anybody would. The problem is nothing is guaranteed.
Reading the story and the links, made me think.
We have VC chucking in massive money and expecting billions in return and failing that dish out a swift euthanasia to the vast the majority within the cohort that didn't do well enough.
Then Growth-stage funders, who seem to have more conservative investment/expected returns - but still "high expectations" compared to a regular old business or an interest rate.
My personal knowledge comes from the other end, "guy with some cash started a company, knew some people with some spare cash, built it and sold it into an existing corporate and exited" He became guy with a bit of spare cash, who moved one up the totem pole with his next company.
From both ends, it all seems a bit "jerky" and inefficient - potentially profitable companies fail as they either don't match the ridiculously high goals set for them - or don't have enough cash reserves to get them over a small blip in monthly revenue.
Maybe more importantly, as a startup your employees care about this - as you've tied their income/job to the prospects of the company. Therefore that "next round of funding" determines whether anybody turns up on Monday.
Now if your company IPOs this all becomes much simpler - keep the shareholders happy, grant employees options - the vast pool of money you're swimming in smooths out the bumps - or at least makes the rules clearer.
There are rules, motivations and just generally "things" that happens "pre-IPO" and stuff that happens "post" - and they are very different. Different from a financial perspective - but from a company perspective it's just people going to work, making something interesting, and wanting money..
Very interesting. Your byline on Medium says "I have a games site called Kongregate". Are you still involved with the company? Is Emily still involved? If so what led you leave and her to stay? What got you to leave EA to start Kongregate?
Whoops, I'm not there anymore. Emily is still CEO. The focus has shifted from being a web games platform to a mobile games publisher. I'm much more of a platform person so it made sense to transition it. She's doing a great job - they've published a lot of great games and are helping indies succeed in the age of of "games as a service." Before I was at EA, I started a game studio in the CD-ROM era. We published an RT…
NetStorm was awesome, and in many ways ahead of its time! You might know that there was actually a failed attempt by fans to pick up with the source and continue to improve/support it. Alas life happened and the effort petered out and was abandoned, but we briefly tried. Wish you guys could have been given the time and money to do a proper reboot!
Edit: Doing a quick nostalgic search, it looks like there ended up being at least one other effort to reboot it that went somewhere. Nice!
These titles are interesting. I have, myself, like pretty much everyone on this planet, never built a billion dollar company. As much fun as it might be to be that rich, it's never seemed to be more realistic to think that than to think about being an astronaut. So the interest to me is the metanarrative that's formed that says, yes, this is something achievable .
It’s more realistic than becoming an astronaut, but not by much. TechCrunch says there were 23 billion dollar exits in the first eight months of 2018. Call it 35 per year. That’s about as likely as being on a Superbowl-winning football team. Young people often neglect realistic opportunities for success to chase unrealistic dreams. As do entrepreneurs. https://techcrunch.com/2018/08/18/global-unicorn-exits-hit-m...
"It's more realistic [to create a billion-dollar company] than to become an astronaut"
You're missing half of the equation. There are a relatively tiny number of people (I assume mostly scientists and military pilots) who have set themselves the goal of becoming an astronaut and are working towards it in a concrete way.
In contrast, virtually everyone is trying to make money, and a huge number of people create companies. Not everyone has "a billion dollars" as their specific goal, but the implicit goal of "as much money as possible" is not uncommon.
Reading the story and the links, made me think. We have VC chucking in massive money and expecting billions in return and failing that dish out a swift euthanasia to the vast the majority within the cohort that didn't do well enough. Then Growth-stage funders, who seem to have more conservative investment/expected returns - but still "high expectations" compared to a regular old business or an interest rate. My perso…
My point is that many companies are 'profitable' in a financial absolute sense - but not up to the expectation of the non-market owners.
If we had a better system (similar to post-float IPO) before IPO to handle this and allow people outside of funding-rounds to invest/sell - I can't see how this wouldn't benefit us all.
The last article I read on HN abput this subject, the author was complaining about only achieving 20% growth per month and that it was a failure.
This seems like an extremely unnatural growth rate. It cannot possibly be sustainable in the long run. I dont know what tricks they are expected to use to achieve the ROIs but definitely, it's some kind of magic trick because this is not natural. How can someone predictably and consistently grow by 20% per month. Not possible. Why is it that the growth rate is almost always correlated with the size of the investment. This is software, production cost approaches 0 at scale, it makes no sense.
These titles are interesting. I have, myself, like pretty much everyone on this planet, never built a billion dollar company. As much fun as it might be to be that rich, it's never seemed to be more realistic to think that than to think about being an astronaut. So the interest to me is the metanarrative that's formed that says, yes, this is something achievable .
I came here also hating the article title and thinking "most people or small businesses don't build a billion dollar company FWIW" but it's well written and worth a read.
The title is kind of meant to provoke that reaction (at least in my case, can't speak for the one I'm responding to.)
The point is really that taking VC money requires you to try for a billion dollar company. Founders should think hard before they commit to that path.
These titles are interesting. I have, myself, like pretty much everyone on this planet, never built a billion dollar company. As much fun as it might be to be that rich, it's never seemed to be more realistic to think that than to think about being an astronaut. So the interest to me is the metanarrative that's formed that says, yes, this is something achievable .
It’s more realistic than becoming an astronaut, but not by much. TechCrunch says there were 23 billion dollar exits in the first eight months of 2018. Call it 35 per year. That’s about as likely as being on a Superbowl-winning football team. Young people often neglect realistic opportunities for success to chase unrealistic dreams. As do entrepreneurs. https://techcrunch.com/2018/08/18/global-unicorn-exits-hit-m...
Perhaps it is ill-advised to spend valuable career time on unrealistic goals, but that is subjective after all. And even for the cautious, it is great that there are resources right here to assist with life-style through unicorn start ups.
And while I assume ycombinator's target are high risk, high return ventures, it's extremely nice that this forum exists under their purview. It must incur some cost to run after all.
The last article I read on HN abput this subject, the author was complaining about only achieving 20% growth per month and that it was a failure. This seems like an extremely unnatural growth rate. It cannot possibly be sustainable in the long run. I dont know what tricks they are expected to use to achieve the ROIs but definitely, it's some kind of magic trick because this is not natural. How can someone predictably…
I saw the same and just assumed the author meant monthly growth targets to reach 20% growth per year. Did they really mean 20% month over month? That's insane.