9 ms·
No Exit
- imperialdrive 12y agothat was loooong... I'm using TLDR for the first time, thank you
- wololo_ 12y agothere's an extended version if you have a kindle
- yixizhang 12y agooh gosh it's too long. who can post a brief version here? if it's a story, what's the end?
- joshu 12y agotwo guys do vague personalization startup. they're very anxious and unhappy. have trouble getting investors. then some sorta commit. then venture firm sorta commits. they are briefly elated, then anxious and unhappy. then some others sorta commit a bit more. then venture firm backs out. then some others invest anyway. they remain anxious and unhappy. (i've helped a lot of startups in my time; the story sounds vaguely correct. certainly i've seen the "we're in, we're out" dance plenty of times.)
- pan69 12y agoDisclaimer; I have no experience with investors what so ever. To avoid the "we're in, we're out" scenario would it be possible to ask investors to sign a commitment agreement when they agree they're in? E.g. an investor says they're in for $100k. You then ask them to sign a commitment agreement that states when they change their mind they owe you 10% of the proposed investment, or something like that. Would this weed out the wanna be investors and guys who are tip toeing around so they can stop wasting your time?
- Bahamut 12y agoWould you want to turn down a potential $100k so quickly?
- pbreit 12y agoThat would probably just lead to "Nos" instead of "contingent Yeses" (which really are pretty good if you think about it). It's not like these investors are backing out.
- nostrademons 12y agoA "no" is significantly better than a "contingent yes", because it lets you move in and focus your time and energy on getting a real yes.
- pbreit 12y agoBut a "contingent yes" is a "yes". Totally disagree that a "no" is better.
- nostrademons 12y agoIt's often not, though. That's what this whole thread is about. Usually when investors waffle it's because they aren't going to commit anyway; they may think that they should and at one level want to, but their fear gets the best of them.
- devindotcom 12y agoHaving given some parts a good read and skipped over others, I am not confident the story was worth telling. Every drop in the ocean has its own story, sure, but why do I want to hear about these guys? It's not really aspirational, it's not really original, it's not really thrilling. I feel like it adds false dramatic weight to a bunch of dudes in one of the richest places in the world, trying to strike it richer. Their worst case scenario is many people's best case. I know that's a fallacy along the lines of "someone always has it worse than you" but I don't really understand why this particular story was told. Maybe I'm just not the target audience. But who is?
- arghbleargh 12y agoI'm still in the middle of reading, but I think many people (especially outside of the Bay area) have a certain perception on what the life of a startup founder is like. And the point of the story is to presumably give a real-life view of things that may be different from the popular perception. In other words, maybe you were not really the intended audience.
- 001sky 12y agoAgree--This story needs a TLDR; {insert here}
- nooron 12y agoNo Exit is a Sartre play. I'm only halfway through the article so I can't speak authoritatively to why the title was chosen. My money says this is a pun, combining the the notion of the "exit" of a startup while implying that they feel stuck in a very specific manner similar to the characters of the play. FYI this is a very facile reading of the play, and Sartre is my least favorite existentialist. I'm not an expert on him but if you want to chat about his main squeeze and intellectual better, de Beauvoir, I'll have more to say. http://en.wikipedia.org/wiki/No_Exit http://en.wikipedia.org/wiki/No_Exit
- 001sky 12y agoAn interesting hypothesis. Thank you. Near the end they discuss how "its easy to get enough money to get in over your head, but its hard to get enough money to keep afloat". That would seem in-line with the broader reading of some kind of existential limbo-land as being (at least one of) the themes. The narrative seems oddly intractable, otherwise. Perhaps 'no exit: the new normal' is more the spirit of the piece.
- tptacek 12y agoI got to "An MIT AI PhD can generally walk alone into an investor meeting wearing a coconut-shell bra, perform a series of improvised birdcalls, and walk out with $1 million." and stopped reading; does it get better, or more credible? Also: the rug store? Really? This is the one on University, right?
- jplewicke 12y agoThe article doesn't get much better, but there may be a kernel of truth to the rug store angle. There's a profile of the rug store owner/prolific angel investor at http://www.forbes.com/sites/victoriabarret/2012/03/21/silicon-valleys-hottest-vc-is-a-rug-dealer/ http://www.forbes.com/sites/victoriabarret/2012/03/21/silico... .
- joshu 12y agoThe rug store that rented space to Google and Paypal early on took equity. They later spun up a venture arm.
- psychometry 12y agoWhat makes you think that sentence you quote was supposed to be credible? It's clearly hyperbole.
- asdfologist 12y agoIs it even remotely true?
- klochner 12y agoTalented technical teams can raise money fairly easily (presuming a somewhat plausible business idea), so yes, it is remotely true.
- enjo 12y agoI would change that to: Well credentialed and talented technical teams. That degree from Stanford or M.I.T. just opens an incredible number of doors when it comes to fundraising.
- jfb 12y agoNick and Chris would never explicitly admit it, but in unguarded moments it seemed clear that they missed their old idea, the one they’d come up with on the boat, the one that had served a broad and stately social purpose. Their moments of greatest animation were when they showed off their first demos and decks, when they seemed decades younger. That strikes a chord.
- asdfologist 12y agoThis probably applies to people's careers in general. How many people end up with their dream job?
- morgante 12y agoI actually didn't get that. Building a saas platform which solves real problems for real companies seems a lot more interesting than making yet another social app.
- pekk 12y agoYou don't "get" the feeling of wanting to do something with a social purpose beyond making money by making some executive happy? Or make something that's just recognizably cool? You don't even understand passion for things other than making money?
- ForHackernews 12y agoMaybe he just doesn't think the nth iOS photo-sharing app (or whatever) is "cool" or has a "social purpose".
- ZanyProgrammer 12y ago"Martino and I had made plans to meet at a coffee shop on the main drag in Mountain View, but when he got there he found it too full of nerds on laptops, so he called an audible in favor of the bar across the street, where he could watch the game." Lemme guess, Red Rock?
- brandnewlow 12y agoHas to be! I always liked the one up on the corner right by the train station a bit better though. Looks out window to dingy Soma Streets. Misses Mountain View
- ZanyProgrammer 12y agoI used to like Red Rock, till I discovered Hacker Dojo just down the street at its former location.
- asdfologist 12y ago"Just as we got back to the city, a report came over the wire that Nest had been acquired by Google for $3.2 billion in cash. Nest had been backed by Google Ventures, their biggest win so far." What does this mean? Isn't Google Ventures a part of Google?
- notduncansmith 12y agoTechnically, yes - however, they stay in very separate camps. Google Ventures is the venture capital investment arm of Google Inc., but as explained by Kevin Rose [1], it's a separate company. Google has no visibility into what GV-backed companies are working on: think of Google as an LP of Google Ventures. [1] http://www.youtube.com/watch?v=ikoQLBuIYl0#t=1920 http://www.youtube.com/watch?v=ikoQLBuIYl0#t=1920 (excellent interview with Kevin Rose on This Week In Startups)
- dataisfun 12y agofwiw, in traditional GP/LP relationships, the LPs know what's going on with the companies (annual meeting, etc.)
- 7Figures2Commas 12y ago> He’d be taking a 40 percent pay cut to join them, but he would have his hard problem and would get to run his own data-science team. Nick and Chris had allotted an equity pool that was larger than average, and they were making Tevye a generous offer—in a highly theoretical sense. San Francisco was full of people walking around with their pockets stuffed with 1.2 percent of nothing...Tevye signed up. He asked to begin on January 27, roughly two weeks before Nick and Chris’ money was set to run out. This is precisely why "What's your runway?" is such an important question to ask before you accept a job offer from a startup.
- vinceguidry 12y ago> This is precisely why "What's your runway?" is such an important question to ask before you accept a job offer from a startup. Let's say you did ask the question and got an as-honest-as-you-can-expect answer. (two months, but we're soon to close a million-dollar round) How does that really help you make your decision? You could look at them and try to judge whether they might make their round, but you're probably better off in Vegas. If I've read the article right, runway doesn't mean what it used to mean anymore. You can keep raising small amounts of money for a good while before investors will give up on you, and even if the company ends up folding, you're still working and getting experience and making connections.
- 001sky 12y agoIf I've read the article right, runway doesn't mean what it used to mean anymore. Have you done the math on how small 2 weeks of funding really is? That should be your follow up question. $50K in the bank? with a $100K line of credit? or $8K in the bank and a vw golf as a backstop? The two examples are worlds apart.
- 7Figures2Commas 12y ago> Let's say you did ask the question and got an as-honest-as-you-can-expect answer. (two months, but we're soon to close a million-dollar round) How does that really help you make your decision? You could look at them and try to judge whether they might make their round, but you're probably better off in Vegas. How doesn't this help you make a decision? Given the number of opportunities out there today, including opportunities outside of Startupville, there's no reason an experienced or talented candidate has to gamble on a startup that might not be able to make payroll if a funding round doesn't close in the next n weeks or months. By the way: there's no such thing as an "as-honest-as-you-can-expect" answer. There's an honest answer and there's a dishonest answer. A founder, executive or hiring manager at a startup should be able to look you in the eye and tell you how much runway the company has based on its current cash position, cash flow and burn rate. Anything less, including an answer that distorts what "runway" means (hint: funding that you expect to raise but haven't yet raised doesn't count), is a huge red flag that you ignore at your own peril.
- bra-ket 12y agoExcellent piece and must-read for all wannabe entrepreneurs
- ghiculescu 12y ago> The partner didn’t want me in the meeting, so I told Nick and Chris I was going to drink my body weight in Odwalla. I wonder what impact (if any) having a journalist tailing them had on their meetings. Interesting read either way.
- unreal37 12y ago"We'll be featured in Wired in 3 months!" It probably helped them.
- drpgq 12y agoSo Hell isn't other people, it's being a startup founder?
- bqe 12y agoI too loved the No Exit (the play) reference this article made. Entrepreneurship as being stuck in hell.
- argonaut 12y agoAdding to tptacek, some other things I dislike about the article: 1. Trying to use ZenPayroll as an example of a vapid startup company. That's one of the worst examples to use to try and back up the general sneering undertone of condescension towards startups. 2. All the random, vapid innuendo that's used in an attempt to frame certain aspects of Silicon Valley as essentially stupid. Like mentioning that the GV partner "apparently" went to a Miley Cyrus party. The weird descriptions of an unrepresentative part of SV: the people at the hacker house (I am willing to bet that there is a disproportionate concentration of "wantrapreneurs"). The picking apart of random quotes (the haughty picking apart of SF locales as if the author was a true SF native). Millions of other random observations that are in reality completely inconsequential.
- trevelyan 12y agoBut the author isn't smearing ZenPayroll. He's pointing out that even if the company is world-changing, the employee has zero basis for making that judgment and is buying into the mythos for other reasons. The comments about that investor show the same obliviousness from a different angle -- the guy was too busy partying with random celebrities to know what companies Google Ventures was even invested in.
- argonaut 12y ago> the guy was too busy partying with random celebrities to know what companies Google Ventures was even invested in. Where was it shown that was the case? That's just your interpretation. In fact, that's just your interpretation of the author's interpretation of the author's friend's interpretation. You list that out and the ridiculousness of the article becomes evident. In fact, I'm willing to bet that was the author's goal. To make you think negatively of this particular VC by inserting random innuendos. I'd certainly agree that the engineer does not know anything about payroll. And that doesn't matter. He's there to build out technology. Presumably the people who started the company are experts in payroll systems. If the author had met a wantrapreneur who had never worked a day in his/her life and wanted to start a payroll company, that would be the absurd situation the author is clearly looking for.
- ontoillogical 12y agoI read the Kindle version (not sure what's cut in this one) and quite liked it. This is the crux of the piece > All the while, Martino’s ultimate warning—that they might someday regret actually getting the money they wanted—would still hang over these two young men, inherent to a system designed to turn strivers into subcontractors. Instead of what you want to build—the consumer-facing, world-remaking thing—almost invariably you are pushed to build a small piece of technology that somebody with a lot of money wants built cheaply. As the engineer and writer Alex Payne put it, these startups represent “the field offices of a large distributed workforce assembled by venture capitalists and their associate institutions,” doing low-overhead, low-risk R&D for five corporate giants. In such a system, the real disillusionment isn’t the discovery that you’re unlikely to become a billionaire; it’s the realization that your feeling of autonomy is a fantasy, and that the vast majority of you have been set up to fail by design. The rest is the story of Nick and Chris intertwined with the writers impressions of the people he met at a $1250/mo for a mattress Hacker Pad he moved into. The author is only slightly contemptuous of the young tech guys who made his beloved San Francisco shitty > “When you have an early-stage company,” he said, “there’s no time to hang out at a cool, trendy bar.” He was 23. The bar might have been cool and trendy in Miami in 2004.
- joshlegs 12y agoyep. no inverted pyramid here. it's straight up buried lead. i kept skimming just to get to the moral of the story. it was good writing to be sure, but i feel like it could have given a little more tidbits to the reader
- argonaut 12y agoThe author is not an SF native and is currently living in New York according to his bio. So "made his beloved San Francisco shitty" is a bit meaningless. The article is nearly at the point where you could claim it's drenched in an air of East Cost condescension, but since the author lived in SF before, that's probably too far.
- deleted 12y ago[deleted]
- bruceb 12y agoIt seems Tevye Krynski, their MIT engineer, while still working there is also doing his own thing: https://angel.co/tevye-krynski https://angel.co/tevye-krynski Talent hard to get and hard to keep maybe.
- bruceb 12y agoIt seems Tevye Krynski, their MIT engineer, while still working there is also doing his own thing: https://angel.co/tevye-krynski https://angel.co/tevye-krynski Talent hard to get and hard to keep maybe.
- Jun8 12y ago"Silicon valley is where the astounding success of the very few is held out to the youth in exchange for their time, their energy, and—well, their youth." I guess everybody should have figured this out by now. This, of course, is exactly how LA and Nashville operate, too, for different areas. The Pretty Womanization of entrepreneurship, if you will.
- devindotcom 12y agoThere's one born every minute, and more than ever they can even code.
- brc 12y agoThis entire story underlies to me the need to bootstrap into something that is already working and has numbers before talking to anyone about taking money. I enjoyed the piece - the writing, the story. It's meant to have a melancholy, no-end-to-the-story tone. That's the entire point of it. What people have to realise is that most of the rest of the world sees silicon valley entrepreneurs based on what they saw in The Social Network. Ziplines into the pool and young girls hitting bongs while nerds with headphones bashed out code nearby, oblivious. So something like this would serve as a strong counter-current to the prevailing narrative, that it's just a case of hopping the bus and pitching your ideas and becoming rich and famous while still young. Realistically many career paths have low probability, high reward exit points, and that continues to attract youth. The movie or music businesses are really no different. It could easily have been a story about LA and a bunch of wannabe actors waiting tables and going to auditions - some will luck into roles, others will burn out and take normal jobs, a lucky few will walk into top roles because of connections, family or supreme talent.
- mkal_tsr 12y ago> This entire story underlies to me the need to bootstrap into something that is already working and has numbers before talking to anyone about taking money. I could not agree more. There are certainly exceptions, but they should be that, not the standard/norm. Aside from the high risk from a business perspective, you're putting other people's financial situation in jeopardy, not to mention you have an obligation to investors to return their money, thus you are working for them despite what equity % they have. My hard-line for my start-up was that I must be able to pay salary from site revenue, and before I could bring anyone on I had to make sure it could support at least 1 person's living expenses (me) because I do not want to risk other's situations/lives on a promise or a "trust me" or a "by the way I need money" sort of deal. It's certainly a slower process but I'm learning a lot along the way in the area's (non-technical) I'm not as familiar with. I guess the other thing is I'd prefer to be able to travel while I work and I don't feel that'd be possible if I were taking VC-money. Either way, it's a fun game, to work on your idea and bring it to fruition.
- madaxe_again 12y agoAfraid to say this isn't quite right - we followed this path. Essentially, the moment you have a functioning, profitable company, your value becomes rooted in multiples of ebitda. When you have a pie-in-the-sky idea, gaggles of engineers, huge running costs and no product, your value is based on "????? Profit!" We're 8 years in, driving about £1bn of ecommerce transactions a year, and there is no exit.
- md224 12y agoI wonder if the "?hn" at the end of the URL was added to get around repost prevention† or a favor for the people watching analytics at Wired? † Original submission: https://news.ycombinator.com/item?id=7628952 https://news.ycombinator.com/item?id=7628952
- kmowery 12y agoAlmost certainly repost prevention... I tried to add this article yesterday and was upvote 4 on the previous link. It just didn't get the random boost it needed to make it to the front page.
- avree 12y agoWhy would they need a special URL? Pretty much every 'analytics package' since '98 has showed referring URL.
- krallin 12y agoNote that the HTTP RFC mandates that browsers should not send referers when doing HTTPS -> HTTP, so this may not be the case here. But, yeah, this was probably to work around the duplicate detector.
- dangrossman 12y agoThere is no referrer in their logs for any visit from this page. Referrer headers are not sent across HTTPS->HTTP transitions; this is a secure page, and the link to Wired is not.
- mikeleeorg 12y agoI like this piece because it doesn't glamorize the startup life as much as other articles tend to. It's a lot more blood, sweat, and tears than anything else. And I rather miss long-form essays too. I didn't mind the length at all.
- VexXtreme 12y agoLiving in a re-purposed warehouse, subsisting on ramen and not knowing whether you'll be able to pay for food tomorrow seems like a very high price to pay just to be physically close to something that mostly lives just as an idea in these young people's minds. If anything, it strikes me as a terribly dismal existence for not a whole lot of reward and enjoyment. The most ironic thing is that the people who reap the most benefits of living in the Valley are the ones working for big established companies. I think it is more probable that many people who decide to do this do it for the lifestyle and for the image they associate with the "startup" life, the same way some people decide to live in hippie communes. It's just a lifestyle choice.
- soup10 12y agoIt's basically just stupid. Lots of people with little to no exceptional talent or skill thinking that they if they just grind it out long enough they'll strike it rich with their mediocre business idea. In NY these people are called naive and stupid. In SV these people are called bold risk-takers.
- argonaut 12y agoI'm pretty sure they're considered naive in SV too.
- towski 12y agoI guess everyone is lacking that bit of information that separates them from the real comptrollers
- rralian 12y agoI think it's quite similar to the aspiring actor taking a bus to Hollywood with a backpack and a dream, and roughly the same chances of making it big. Except it's probably easier to make a go at tech outside of SV than to make a go of acting outside of Hollywood (and New York). And a lot easier to bootstrap too. But from the aspirant's point of view it's similar.
- 12y ago
- Myrmornis 12y agoWell written and pretty funny in places. Reminded me a bit of David Foster-Wallace; I guess that was the intention. The bit about the Indian ex-doctor and his girlfriend was funny.
- thom 12y agoInteresting. I read the whole thing thinking it was a Douglas Coupland extract.
- robomartin 12y agoBrutal reality. I remember a moment many years ago when I looked over at the bookshelf behind my desk and my eyes landed on a book titled "Doing Hard Time" (it's about real time embedded systems). It was somewhere around 3:00AM. I had been in that room, coding, since 8 or 9 in the morning of the prior day. I had been doing 18 hour days, seven days a week, for the last year and a half. If I was awake I was in this little 10 x 20 ft room coding away. For some reason I saw that book and my first thought was that I now knew what being imprisoned might feel like. Sad realization. The story got much better after that low point as the product was completed and schedules became sane (but never 9 to 5). I have to say I would not change any part of that experience. The highs and the lows were amazing. Learning, pushing yourself to the limit and back. Finding out what you are made of. Remarkable. That said, had it not ended well the story might have been very different.
- LordHumungous 12y agoLol. The kids once again learn there's nothing new under the sun.
- dirktheman 12y agoSilicon Valley today is like 1849 all over again. A gold rush. Everybody and their cousin flock to San Francisco expecting to find gold and strike it rich. They don't realize that it takes an insane amount of hard work and an ever insaner amount of sheer luck to make it. Sure, some of them succeed. But most of them don't, and several leave SF far worse off than when they arrived. I thoroughly enjoyed this read. It's a nice counterbalance to all the success stories. Not that I mind reading success stories, but sometimes we forget that not everybody makes it big. Mandatory reading for anyone raising money!
- namenotrequired 12y agoIt's funny you say that - I've been wondering lately whether the current culture in Silicon Valley is a result of heritage (whether genetic or cultural) from those who moved to the area during the gold rush.
- dirktheman 12y agoInteresting thought. Where I come from (The Netherlands) we pride ourselves on our 'Dutch East India Company-mentality', a spirit of trade, perseverance and guts. Aside from the slave trade-thingy, of course.
- digitalengineer 12y agoNo, we're from a Protestant culture. We work hard or we feel guilty.
- namenotrequired 12y agoFunny, I'm dutch too. Yes, as long as we stay humble. :)
- digitalengineer 12y agoDuring the gold rush few really did find their fortune. But the ones who got really, really rich were the guys selling the tools (to dig). Who's selling the tools today?
- _pmf_ 12y ago> "New York didn’t care about Chicago, but Chicago was where the hogs were being slaughtered. Now New York doesn’t care about San Francisco, but today the hogs are being slaughtered in San Francisco.” What Turner meant is that these are the charnel grounds of the new economy, and that there isn’t anything all that new about the new economy. Who writes this kind of over-dramatizing bullshit? Nobody forces these people to follow their grandiose visions. They could just do useful work like the rest of us, which isn't quite as romantic, but is doing the world as a whole better than another failing "product" (which is the moniker for a useless website that people in 1999 would have put together in 2 weekends without extorting $20000 of VC money).
- rushabh 12y agoThe author is using cynicism to make a point across. > They could just do useful work like the rest of us, which isn't quite as romantic, but is doing the world as a whole better than another failing "product" seems like "bullshit"
- nutjob2 12y agoI live in SF and pay myself about $25K a year. I'm self funded on about $150K cash (since 2010) and live very comfortably. I haven't taken VC money and I have no plans to. My question is: why do people insist on playing this game the same broken way? Raise money, try to grow as quickly as possible to raise more money, getting massively diluted along the way, and hope that you sell or IPO at $1B+ or $19B or whatever valuation? It's a mug's game given that only a tiny, tiny, tiny fraction of people get there. What's wrong with growing organically, crafting your product as you grow more slowly and taking less VC money and keeping more equity for yourself? You might make less money overall but you have more chance of actually making it if you have a real idea. And why do you need that money again? Wouldn't you rather make a great product? Lots of morons have heaps of money, but how many have made great products? If you want big money and don't care about your product and are smart and hardworking, go work in finance, it's much a more reliable way to get rich. It seems to me most people are taking long, long shot ideas and hoping for the very unlikely best and being some sort of hero.
- esrauch 12y agoOut of curiosity, how do you live comfortably on $25K a year in SF when the rent for a studio apartment alone costs more than that?
- JonoBB 12y agoYes, this. Why is this all-or-nothing approach romanticised? There are untold thousands of bootstrapped companies slowly building their product without taking on any (or very little) outside funding and earning a decent living. It may not have the prospects of a huge payoff, but then again, you may have better chances of winning the lottery than winning a huge payoff.
- drb311 12y agoFelix Salmon's review and analysis based on the book is more informative than the book itself, read it: http://blogs.reuters.com/felix-salmon/2014/04/21/the-most-expensive-lottery-ticket-in-the-world/ http://blogs.reuters.com/felix-salmon/2014/04/21/the-most-ex...
- pasbesoin 12y agoSo, Wired has an "hn" query string qualifier? (See the OP URL.)
- riggins 12y agoI read the article. After letting it marinate, I concluded that I completely disagree with the author. Here's the crux of the argument. One night I escaped the hacker house to go out with a group of founders from various startups ... At 10:30 the waitress came over to take our orders for a second round. I ordered another whiskey, but everybody else looked at their phones with muted anxiety. At 11 pm the founders rose in pairs to leave, as if they had an exam in the morning. One founder (his company was literally an app that optimized app stores for other apps), who’d ordered a water and had taken off neither his backpack nor his jacket, apologized on behalf of everybody for leaving so early. vs. By contrast, on a weekend afternoon I went over to find my young cousin—a talented and good-humored UX designer for Google—with his friends in Alamo Square, where they were winding down a barbecue in the January sun. IMO, the author has outsmarted himself trying to find a way to 'upend' conventional wisdom. I just don't think its bad for smart, motivated people to sacrifice bar crawls and bbqs in the hope of accomplishing something important. That doesn't sound like a problem to me ... that sounds like maturity.
- taybin 12y agoBut they weren't accomplishing something important. They had pivoted away from their earlier, exciting product and were essentially an underpaid R&D team.
- mcguire 12y ago"You can read an extended version of this piece by downloading it from the WIRED app or as a Kindle ebook." Holy crap, there's more?
- gtirloni 12y agoThroughout the article, the founders mention "making room" or hoping to "have room" for some investor. I mean, wouldn't you have infinite room for investors? What's limiting how much they can take? As it's obvious, I've never done at fund raising, so can someone explain (or point to a reference) what's the deal?
- iwasphone 12y agoInvestors arrive at an amount based on their estimate of the company's value and the share of equity they receive in return for their investment. If the founders then get commitments from additional investors, the company would have to attain a much larger value at exit time (i.e., IPO or purchase) for any of the investors to get a reasonable return. When done with consent it's called overcommitting. When done without consent, it's called fraud. Disclaimer: IANAI
- jmzbond 12y agoThis strikes a chord that's been humming for awhile. People flock to start-ups expecting wonderful lifestyle, changing the world, yada yada yada. But then they fall prey to the same societal pressures that they sought to escape from in the first place.In the end they're still climbing the ladder, just instead of the end point being CEO, their end point is IPO. There's not a huge difference. I wonder if it's possible to bring "slow" principles (as in slow food) to the world of start-ups? There's nothing wrong with fast and lean, but the interpretation of it has been perverted to a great extent I think. Personally as a founder I aspire to stay bootstrapped and migrate to financially sustainable to scale. Even if that means $20K for 10 years, that's still enough money to live in SF if you know how, and I don't want to subject myself to pressures from any number of investors demanding returns. I want to focus on the social vision that I want to achieve, not monetization. Yes I'm starting from a more idealist perspective, but hey, I expect some of that to be worn away with time, hopefully by starting from a greater base, I'll still keep some of it by the end!