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Tailscale has raised $160M

tailscale.com

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Re: Tailscale has raised $160M

#121
post #25

IMHO they should be a good steward and toss the Wireguard guy a mil considering Tailscale is pretty much Wireguard with a GUI on top.

> they should be a good steward Tailscale did make a donation to WireGuard. They have regularly contributed to wireguard-go , including the complicated GRO/GSO bits. "Tailscale made a donation during September 2022, as part of their business centered around WireGuard." https://www.wireguard.com/donations/ / https://archive.vn/MMAXO > Tailscale is pretty much Wireguard with a GUI on top. Well, isn't PUBG a GUI on top…

PUBG pays licensing fees to Epic Games (Unreal).

Re: Tailscale has raised $160M

#122

When we started Tailscale in 2019, we weren't even sure we wanted to be a venture-backed company. We just wanted to fix networking. Or, more specifically, make networking disappear — reduce the number of times anyone had to think about NAT traversal or VPN configurations ever again. Isn't logtail what got Avery et al started? https://github.com/tailscale/tailscale/tree/main/logtail https://apenwarr.ca/log/20190216 /…

That's quite insightful actually. Perhaps might explain the tailscale name a little better in that context also.

Re: Tailscale has raised $160M

#123
post #70

Earlier quoted context omitted.

Hm OK well thinking out loud, $100M / 3 is $33M / year? I don't know much about Tailscale, nor about how much it costs to run a company, but I thought it was mostly a software company? I would imagine that salaries are the main cost, and revenue could cover salaries? (seems like they have a solid model - https://tailscale.com/pricing ) I'm sure they have some cloud fees, but I thought it was mostly "control plane" an…

> I don't know much about Tailscale, nor about how much it costs to run a company $33m/year is only 33 fully loaded software developers including all overhead like HR and managers and office space, and also a cloud hosting bill. 33 really isn't that many.

I'd be surprised if the average package for SWE is $1M/year (fully loaded).

Re: Tailscale has raised $160M

#124

Earlier quoted context omitted.

> I don't know much about Tailscale, nor about how much it costs to run a company $33m/year is only 33 fully loaded software developers including all overhead like HR and managers and office space, and also a cloud hosting bill. 33 really isn't that many.

I'd be surprised if the average package for SWE is $1M/year (fully loaded).

Generally package is around half of what company spends per extra engineer. And $500k average for a tech heavy product company doesn't sound too far off.

Re: Tailscale has raised $160M

#125
post #85
post #73

Earlier quoted context omitted.

One of the main problems with raising too much is that you stop caring about product-market fit and can go on tangents that do not make you competitive. This is quiet common afaik.

Yes; you will burn through all the capital you raise in ~18 months. It is _extremely_ difficult to efficiently allocate large raises (100M+) in 18 months. In fact, I’m developing a pet thesis that no single human or business can efficiently allocate more than $100M. This would imply that any time a single raise is more than 100M, the investors always would have had a better return by splitting it into chunks of 100M…

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Re: Tailscale has raised $160M

#126
post #76

Earlier quoted context omitted.

If it's hype, it's not hype the way you're thinking. I've shown Tailscale to a lot of people (this is less salient now, when pretty much everybody uses Tailscale) and the most common reaction I've gotten is "holy shit". It is spooky simple to get working, and it's spooky simple to go from a working installation to a VPN configuration that would take many many hours to replicate with pre-existing tools. There may be V…

Because you're delegating the control plane to Tailscale. Somehow we went decades without this being a thing for security reasons, dealt with the management of VPN appliances, and now suddenly everyone is OK with Tailscale owning the control plane of their VPN for the sake of convenience.

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Re: Tailscale has raised $160M

#128
post #115
post #73

Earlier quoted context omitted.

One of the main problems with raising too much is that you stop caring about product-market fit and can go on tangents that do not make you competitive. This is quiet common afaik.

That's much less of a problem than not being able to raise enough in the next round because you only 1.5x'd instead of 3 or 5.

Isn't it better to 1.5x in 6 months on 40 million than 3x in 2 years on 160?

By definition focusing on things that don't grow your business because you have way too much money in the bank is going to be worse for your business than being forced to focus because you've only got a year of runway.

Re: Tailscale has raised $160M

#129

Earlier quoted context omitted.

Equity investments like this don't need to be repaid, so there isn't a legal obligation to repay them. Of course, there is an obligation to maximize shareholder value — but that is totally independent of the dollar amount invested. When founders raise this much money, it's because there's (1) a lot they want to do and hire for, or (2) they don't want to worry about monetizing the product for a significant period and…

> Equity investments like this don't need to be repaid You are saying equity is not bonds. However investors expect to be repaid in the future with control and exhorbitant interest rates (based on risk). VC invests to make money, but that money comes from future equity rounds or IPO. If you didn't take the VC money (and the business achieved the same growth without the money) then you'd expect you would have been bet…

Not only the "expectation" but lots of VCs have preference built in that guarantees them huge returns on basically any liquidity event. It's probably not as likely in a Series C like this but 2-3x preference is not unheard of. There are few investment vehicles where for every $1 you put in you're guaranteed to get the first $3 made back first.

Re: Tailscale has raised $160M

#130
post #70
post #27

Earlier quoted context omitted.

When they raised the 100M three years ago, I'm pretty sure they said they didn't need it and were saving it for a rainy day (or words to that effect), always seemed very odd at the time. Two q's for anyone who cares to speculate: have they burnt the original investment already? And if not, why would they need more funding? AFAICS there's no real competition in the market place for their product today, the only thing…

Hm OK well thinking out loud, $100M / 3 is $33M / year? I don't know much about Tailscale, nor about how much it costs to run a company, but I thought it was mostly a software company? I would imagine that salaries are the main cost, and revenue could cover salaries? (seems like they have a solid model - https://tailscale.com/pricing ) I'm sure they have some cloud fees, but I thought it was mostly "control plane" an…

You're not wrong to think Tailscale is primarily a software company, and yes, salaries are a big part of any software company's costs. But it's definitely more complex than just payroll.

A few other things:

1. Go-to-market costs

Even with Tailscale's amazing product-led growth, you eventually hit a ceiling. Scaling into enterprise means real sales and marketing spend—think field sales, events, paid acquisition, content, partnerships, etc. These aren't trivial line items.

2. Enterprise sales motion

Selling to large orgs is a different beast. Longer cycles, custom security reviews, procurement bureaucracy... it all requires dedicated teams. Those teams cost money and take time to ramp.

3. Product and infra

Though Tailscale uses a control-plane-only model (which helps with infra cost), there's still significant R&D investment. As the product footprint grows (ACLs, policy routing, audit logging, device management), you need more engineers, PMs, designers, QA, support. Growth adds complexity.

4. Strategic bets

Companies at this stage often use capital to fund moonshots (like rethinking what secure networking looks like when identity is the core primitive instead of IP addresses). I don't know how they're thinking about it, but it may mean building new standards on top of the duct-taped 1980s-era networking stack the modern Internet still runs on. It's not just product evolution, it's protocol-level reinvention. That kind of standardization and stewardship takes a lot of time and a lot of dollars.

$160M is a big number. But scaling a category-defining infrastructure company isn't cheap and it's about more than just paying engineers.

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