What are the failure points of hosted solutions like Tail scale versus self hosted options?
Tailscale has raised $160M
61–70 of 354 posts
Re: Tailscale has raised $160M
#62Earlier 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…
GP didn't talk about "repaying" anything. Taking 160M instead of 40M at the same valuation means giving up 4x the shares, and that's going to result in a bigger voice for those investors at the table in making decisions about the future path of the company.
What if they were offered $160mm and Tailscale countered with 4X the valuation, lowering the number of shares by 75%? Similarly, what if they wanted $40mm but the only deal on the table was $160mm due to ownership targets of funds that can actually write $40mm+ checks? It's hard to play these armchair games, even less so when the terms aren't known.
Re: Tailscale has raised $160M
#63IMHO they should be a good steward and toss the Wireguard guy a mil considering Tailscale is pretty much Wireguard with a GUI on top.
This is not correct. Wireguard establishes a tunnel between peer A and B, and its simplicity stops there. Tailscale does tons of complex networking, filtering, nat traversal, DNS, file sharing, etc. Wireguard is a small part of the codebase today, which has grown a lot. It’s a bit like saying Dropbox is just a GUI on top of TLS.
Probably closer to say that Dropbox is a GUI on top of WebDAV
Re: Tailscale has raised $160M
#64Earlier quoted context omitted.
GP didn't talk about "repaying" anything. Taking 160M instead of 40M at the same valuation means giving up 4x the shares, and that's going to result in a bigger voice for those investors at the table in making decisions about the future path of the company.
What if they were offered $160mm and Tailscale countered with 4X the valuation, lowering the number of shares by 75%? Similarly, what if they wanted $40mm but the only deal on the table was $160mm due to ownership targets of funds that can actually write $40mm+ checks? It's hard to play these armchair games, even less so when the terms aren't known.
You're right that we don't know all the terms, but $160M raised is not small and it is very reasonable to worry about what level of control will be given up long term because of it.
Re: Tailscale has raised $160M
#65If they had taken just say $40 million would they be able to sustain their project for the foreseeable future and perhaps not yield as much future product direction and equity? I honestly don't know how this big dealmaking works but it strikes me that when you take out this big of an obligation that the obligation has a gravity that may drag you in a direction you (or consumers) do not want to go. Love Tailscale as a…
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…
(3) investors offer the option for founders (and earlier investors) to take money off the table by buying up a percentage of their stake, essentially creating a mini-exit for the founder and earlier investors
Re: Tailscale has raised $160M
#66IMHO they should be a good steward and toss the Wireguard guy a mil considering Tailscale is pretty much Wireguard with a GUI on top.
Jason Donenfeld is listed as a Technical Advisor on https://tailscale.com/company. Most companies pay their advisors something, so I assume something monetary is going on here for him.
Re: Tailscale has raised $160M
#67Earlier quoted context omitted.
Most of this was successfully done 20 years ago by tinc, which is a project written by a couple of European guys in their free time. It even supports routing traffic through other peers and does peer discovery just like BitTorrent (but before BitTorrent even existed) — there is no need for a central server. What tailscale has over it is hype, lots and lots of hype. Also a much more well thought out, and arguably more…
And ease of use, IMHO. That's a bit one with these kind of things. I will admit not having used tinc but I imagine it's not as polished. Polish costs effort and money and it also really truly saves time and makes for a better product. So that matters.
It definitely matters. I used tinc extensively at a prior gig, and it not having a story for its own key distribution was exceedingly painful.
Re: Tailscale has raised $160M
#68How is Tailscale going to achieve at least $1B in annual revenue? That’s the kind of promise that would have to be made to investors in order to raise funding of this magnitude.
$1B annual revenue is ~4m business users. This is considerably smaller than e.g. Zscaler or Okta. It's a big goal, but achieving it does not require them to sign a majority of businesses or build a monopoly.
Re: Tailscale has raised $160M
#69Earlier quoted context omitted.
This is not correct. Wireguard establishes a tunnel between peer A and B, and its simplicity stops there. Tailscale does tons of complex networking, filtering, nat traversal, DNS, file sharing, etc. Wireguard is a small part of the codebase today, which has grown a lot. It’s a bit like saying Dropbox is just a GUI on top of TLS.
> It’s a bit like saying Dropbox is just a GUI on top of TLS. Well, it is. After all, for a Linux user, you can already build such a system yourself quite trivially...
A weekend project tops
Re: Tailscale has raised $160M
#70When I saw the new round, I was instantly worried about change in direction that will most likely come with this, and effectively drive away regular users from a tool that seems universally loved. Similar sentiment can be seen in the discussion from three years ago [1] when they raised $100M. [1] https://news.ycombinator.com/item?id=31259950
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" and not data plane, so it should be cheap?
I could be massively misunderstanding what Tailscale is ...
Did the product change a lot in the last 3 years?