4 ms·
It seems that having investors increases the likelihood that your business will be labeled a failure. If you take $10 million, you have to exit with at least t
by byoung2 16y ago
It seems that having investors increases the likelihood that your business will be labeled a failure. If you take $10 million, you have to exit with at least that to be labeled a success. If you take nothing, or just a token amount, and reach ramen profitability, you can exit with any amount and be a success.
It is just like making movies. Spend $200 million on a movie, and it needs to gross at least double that to be a success. Make a $1 million indie movie, and it will be a smash hit when it earns $5 million.
- dolinsky 16y agoIt's honestly nothing like making movies, because most movies that are considered 'successes' wind up losing money. http://www.npr.org/blogs/money/2010/05/the_friday_podcast_angelina_sh.html http://www.npr.org/blogs/money/2010/05/the_friday_podcast_an...
- byoung2 16y agomost movies that are considered 'successes' wind up losing money. It's actually just like the movies. The movie is set up as a corporation, which is funded by an investment by the studio (read:venture capital). The movie is made by the producer, director, actors, crew (founder, advisors, employees, contractors). The movie is released (public launch), and hopefully after a few months of being in theaters (ramen profitable), the movie leaves theaters (makes an exit). The corporation that was formed to make the movie pays back the studio (its investors), and the producers, directors, and maybe the lead actors get their backend cut (stock options). The corporation always "loses money" because the studio always gets paid back.