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I sold Baremetrics

baremetrics.com

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Re: I sold Baremetrics

#511

Post by hajimemash »

fairity wrote: post #374

Everyone's talking about how the founder got lucky that his investors let go of their $800K liquid preference. My guess is that this wasn't all luck. The VC's in this case knew how transparent this founder was being in reporting his startup journey. They knew that this decision would get publicity. With this knowledge, the VC firm probably made a calculated decision to forego their liquid pref in return for the good…

Very interesting to see the benefit of transparency materializing into real touchable cash.

Re: I sold Baremetrics

#512

Post by IshKebab »

cercatrova wrote: post #371
IshKebab wrote: post #323

Earlier quoted context omitted.

In what way would it have been trouble? Surely they legally own that bit of the company? Something doesn't make sense. $800k is not a small enough amount for any responsible investment fund to walk away from. I wonder if maybe it was actually worth way less. I think he said they walked away from their $800k investment, but maybe that was at a much higher valuation. If it was only worth $80k I can see them not botheri…

800k actually is small enough to give away when you're dealing at that scale. The lawyers fees and other fees wouldn't even be worth that much from a sale. The bigger reason is reputation. If Techcrunch posted an article saying, founder screwed out of acquisition by billion dollar VC, it wouldn't work out so well for the next founder considering that VC.

But he would have still walked away with almost $3m, how would that be screwing him?

Re: I sold Baremetrics

#513

Post by cercatrova »

IshKebab wrote: post #512
cercatrova wrote: post #371

Earlier quoted context omitted.

800k actually is small enough to give away when you're dealing at that scale. The lawyers fees and other fees wouldn't even be worth that much from a sale. The bigger reason is reputation. If Techcrunch posted an article saying, founder screwed out of acquisition by billion dollar VC, it wouldn't work out so well for the next founder considering that VC.

But he would have still walked away with almost $3m, how would that be screwing him?

Why would they just want their original investment back? They'd demand 5 or 10x the original amount (as VCs) which completely wipes out the acquisition.

Re: I sold Baremetrics

#514

Post by lorthemar »

I'm really happy for Josh, I loved the blog posts. Always so honest and straight forward. Sadly, many SaaS companies hit a brick wall after initial investments and the first growth streak. Especially, analytics companies.

I've worked with a mobile analytics company in the past and it was pretty much the same story. Only, they weren't as transparent and couldn't walk away with a profitable exit.

So this really looks like the best way he could exit without burning himself out.

Re: I sold Baremetrics

#515

Post by bostonvaulter2 »

ignoramous wrote: post #411
lubos wrote: post #403

> We’re also a company that has purposefully operated right around breakeven for years. And here is the problem. Take VC money and now you are forced to run company at breakeven point. This company would be perfectly fine operating with half the staff and generating for the CEO half a million in profits per year - every year. He could have met his family financial goals long ago and still keep the company. This is wh…

Thankfully lifestyle-business focused "VCs" are a thing: https://tinyseed.com , https://earnestcapital.com , https://indie.vc

I wish we could move past using the term "lifestyle-business", it's basically a slur in my mind.

Re: I sold Baremetrics

#516

Post by IshKebab »

cercatrova wrote: post #513
IshKebab wrote: post #512

Earlier quoted context omitted.

But he would have still walked away with almost $3m, how would that be screwing him?

Why would they just want their original investment back? They'd demand 5 or 10x the original amount (as VCs) which completely wipes out the acquisition.

Because some money is better than no money? VCs don't really get to demand a certain amount. Investment doesn't work like that.

Re: I sold Baremetrics

#517

Post by cercatrova »

IshKebab wrote: post #516
cercatrova wrote: post #513

Earlier quoted context omitted.

Why would they just want their original investment back? They'd demand 5 or 10x the original amount (as VCs) which completely wipes out the acquisition.

Because some money is better than no money? VCs don't really get to demand a certain amount. Investment doesn't work like that.

That is incorrect, VCs absolutely have preferential shares with liquidation preferences which can be multiples of their returns. Some money is not really better than no money if their reputation comes out as nickel and diming their founders, and future founders don't want to take their money, and if the VC misses out on a big exit as a result, now the VC has lost potentially much more than getting the 800k back.

Re: I sold Baremetrics

#518

Post by dsfdsfkl »

treis wrote: post #500
relaunched wrote: post #498

Earlier quoted context omitted.

The issue is that their fund business model looks at a 20% roi over 5 years as a loss. If they do that 50% of the time, they don't raise another fund. There is nothing wrong with getting what you are entitled to. But, it's worth praising when someone forgoes what they are entitled to, when the situation really isn't a win - win. The VC took an immaterial loss, by choosing for give up an immaterial gain, so that somet…

>The VC took an immaterial loss, by choosing for give up an immaterial gain, so that something material can happen for the founder and their team. But that's not what happened. The business was sold for $4 million. The only difference the VCs actions made was that the founder walked away with 3.7 million instead of 2.9.

Why are you so bitter dude, the guy worked his ass off and got his exit. Celebrate it and look to see how you can replicate it instead of coming off as jealous.

What a VC does with their money is their choice, a 800k return isn't worth their time and energy if they can spend that time and energy on a billion dollar company within their portfolio.

Re: I sold Baremetrics

#519

Post by dsfdsfkl »

tptacek wrote: post #387
georgeecollins wrote: post #216

Earlier quoted context omitted.

I don't want to make any moral judgements against people making business decisions, in particular this founder for making the best deal possible. Good for him. However, no matter how much money General Catalyst or Bessemer made last year, I would not want to invest with them going forward. I get that this is only money on the margins, and they get a benefit from a write off. Still, how hard would they have had to fig…

This is going to sound snarky, but isn't: assuming you're within the normal parameters of an HN commenter --- even a very successful one --- neither General Catalyst nor Bessemer wants your money. Top tier VC firms aren't like Vanguard. They are choosy about their LPs --- that's why they're called LPs and not "investors". They have an investing thesis, and they go sell it to university endowments and pension funds. T…

lol wtf, most people are talking about founders pitching for investment.

If they have standard term sheets from GC or Softbank, likely the founder will go with GC

No one is talking about GC's investors....

Re: I sold Baremetrics

#520

Post by tptacek »

dsfdsfkl wrote: post #519
tptacek wrote: post #387

Earlier quoted context omitted.

This is going to sound snarky, but isn't: assuming you're within the normal parameters of an HN commenter --- even a very successful one --- neither General Catalyst nor Bessemer wants your money. Top tier VC firms aren't like Vanguard. They are choosy about their LPs --- that's why they're called LPs and not "investors". They have an investing thesis, and they go sell it to university endowments and pension funds. T…

lol wtf, most people are talking about founders pitching for investment. If they have standard term sheets from GC or Softbank, likely the founder will go with GC No one is talking about GC's investors....

I don't know what comments you're referring to, but my comment refers to the one it replies to.
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