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Venture-capital infusions shrank Box founders’ stakes, ignited strife

wsj.com

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Re: Venture-capital infusions shrank Box founders’ stakes, ignited strife

#11

Post by ojbyrne »

gkoberger wrote: post #5

Stories like this make me think it's almost not worth starting a company. Give 1,200 talented people an awesome place to work, be CEO of a company you truly enjoy leading, provide thousands of companies with a service that makes their lives easier, entertain 150k Twitter followers, make a bunch of your employees first-time millionaires, make millions for your investors, make yourself more money than you'll ever be ab…

Except you're out at 35, a few million in the bank, and a track record that has VCs lining up around the block for whatever you do next.

Re: Venture-capital infusions shrank Box founders’ stakes, ignited strife

#13

Post by evunveot »

curiouslurker wrote: post #4
vitalus wrote: post #3

Behind a paywall :(

google the headline to get a direct link!

Note: this trick doesn't work in Firefox now that Google defaults to https. Firefox won't send a Referer header when you're going from an https page to an http page, so wsj.com doesn't know you're coming from Google. (I don't know whether it sends one for https-to-https cross-domain links.)

Ninja edit: that is, this is how my Firefox behaves. Not sure if it's caused by an add-on like HTTP Everywhere or something like that. But it seems like I read something from the DuckDuckGo blog describing this behavior.

Chrome sends a Referer of "https://www.google.com" (i.e. just the domain), so wsj.com lets you past the paywall.

Re: Venture-capital infusions shrank Box founders’ stakes, ignited strife

#14

Post by austenallred »

gkoberger wrote: post #5

Stories like this make me think it's almost not worth starting a company. Give 1,200 talented people an awesome place to work, be CEO of a company you truly enjoy leading, provide thousands of companies with a service that makes their lives easier, entertain 150k Twitter followers, make a bunch of your employees first-time millionaires, make millions for your investors, make yourself more money than you'll ever be ab…

I read the first sentence and thought you were saying it's not worth it. I'm glad I finished your comment.

There's certainly a difference between $100 million and $1 Billion, but not one that will change your level of happiness.

Re: Venture-capital infusions shrank Box founders’ stakes, ignited strife

#16

Post by gkoberger »

driverdan wrote: post #12

> Mr. Cuban put in $250,000 and got a nearly one-third stake in the fledgling firm. Why would someone give up a third of their company for $250k? That seems crazy to me.

Less crazy when it's 2005 and you're a college student with no money, and you look at Cuban as a business partner rather than an investor.

Re: Venture-capital infusions shrank Box founders’ stakes, ignited strife

#17

Post by austenallred »

driverdan wrote: post #12

> Mr. Cuban put in $250,000 and got a nearly one-third stake in the fledgling firm. Why would someone give up a third of their company for $250k? That seems crazy to me.

Because giving up 1/3 of a company that will make you rich is better than your company failing.

You couldn't always get a $5 million valuation for your pre-revenue, pre-traction product. When it comes down to it, you have to take what you can get.

Re: Venture-capital infusions shrank Box founders’ stakes, ignited strife

#18

Post by wilsynet »

Success in a VC backed company means dilution. Massive success means massive dilution.

The only time it doesn't mean that is when we're talking about super unicorns (Facebook) or primarily self-funded early on along with early traction (Workday).

Re: Venture-capital infusions shrank Box founders’ stakes, ignited strife

#19

Post by anigbrowl »

driverdan wrote: post #12

> Mr. Cuban put in $250,000 and got a nearly one-third stake in the fledgling firm. Why would someone give up a third of their company for $250k? That seems crazy to me.

Because you don't have much capital or revenue when you're just starting out, you take what you can get. If you demand a minimum of, say, $5 million for such a stake and nobody is willing to give it to you, what then? Your unshakeable self-belief isn't going to magically make payroll or pay for your overhead or purchase That Thing You Need.
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