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New Trends In Startup Financing Explained For Laymen

95 points by subbu 16y ago

patio11 16y ago
This was originally the comment here ( http://news.ycombinator.com/item?id=1655325 http://news.ycombinator.com/item?id=1655325 ), but somebody asked me to blog it. I added some pretty pictures. I'll shut up for a while now, I promise.
- expertcs 16y ago
  You should blog this one too: http://news.ycombinator.com/item?id=1633062 http://news.ycombinator.com/item?id=1633062
- solutionyogi 16y ago
  Patrick, I think I vouch for everyone on HN when I request you to not shut up. Please keep these comments/blog posts coming. :)
- subbu 16y ago
  I was the one who suggested that. Thank you.
- rumpelstiltskin 16y ago
  Thank you! Now if someone could tackle the rest of the variables in startup funding in the same easy-to-follow manner, they'd get some seriously good karma (not points, actual goodwill).
- jacquesm 16y ago
  I wouldn't worry about the quality, the way you do lower in the thread, it's excellent. About your parting words: > I rather like getting 100% of the returns. Do you mean that you'd rather run a smaller company at 100% than to have a larger company with outside investors or do you mean that you don't think you'd be doing significantly better if you had more money to spend to grow your business? The first would make sense, that's a personal preference, but if it is about the return itself in an absolute sense then outside capital can (but doesn't have to be) a booster, you could come out ahead even after the fact that you no longer have 100% is factored in.
seiji 16y ago
Similarly, Martin from Rapportive wrote almost the same thing back in May (graphs and all): http://www.yes-no-cancel.co.uk/2010/05/05/valuation-caps-on-convertible-notes-explained-with-graphs/ http://www.yes-no-cancel.co.uk/2010/05/05/valuation-caps-on-...
- patio11 16y ago
  You know the feeling you get when you spend two hours coding up a fairly clever way to do something and then you find out it would have been a tenth of the work if you had checked the standard library first? Yeah, that is what I'm feeling right now.
  - Eliezer 16y ago
    Yours is easier to read. Wasn't wasted.
    - joshu 16y ago
      Keep updating it. There is a lot more to the situation than the numbers. Why are they bad? Why are they good? How can they misincentivize bad behavior? The situation is complex
RiderOfGiraffes 16y ago
Added to my "Great Articles" repository. I'm looking to create version 0.2 soon, incorporating the lessons I'm learning from using the current, butt-ugly pre-alpha version.

95 points by subbu 16y ago

This was originally the comment here ( http://news.ycombinator.com/item?id=1655325 http://news.ycombinator.com/item?id=1655325 ), but somebody asked me to blog it. I added some pretty pictures. I'll shut up for a while now, I promise.

expertcs 16y ago
You should blog this one too: http://news.ycombinator.com/item?id=1633062 http://news.ycombinator.com/item?id=1633062
solutionyogi 16y ago
Patrick, I think I vouch for everyone on HN when I request you to not shut up. Please keep these comments/blog posts coming. :)
subbu 16y ago
I was the one who suggested that. Thank you.
rumpelstiltskin 16y ago
Thank you! Now if someone could tackle the rest of the variables in startup funding in the same easy-to-follow manner, they'd get some seriously good karma (not points, actual goodwill).
jacquesm 16y ago
I wouldn't worry about the quality, the way you do lower in the thread, it's excellent. About your parting words: > I rather like getting 100% of the returns. Do you mean that you'd rather run a smaller company at 100% than to have a larger company with outside investors or do you mean that you don't think you'd be doing significantly better if you had more money to spend to grow your business? The first would make sense, that's a personal preference, but if it is about the return itself in an absolute sense then outside capital can (but doesn't have to be) a booster, you could come out ahead even after the fact that you no longer have 100% is factored in.

seiji 16y ago

Similarly, Martin from Rapportive wrote almost the same thing back in May (graphs and all): http://www.yes-no-cancel.co.uk/2010/05/05/valuation-caps-on-convertible-notes-explained-with-graphs/ http://www.yes-no-cancel.co.uk/2010/05/05/valuation-caps-on-...

patio11 16y ago
You know the feeling you get when you spend two hours coding up a fairly clever way to do something and then you find out it would have been a tenth of the work if you had checked the standard library first? Yeah, that is what I'm feeling right now.
- Eliezer 16y ago
  Yours is easier to read. Wasn't wasted.
  - joshu 16y ago
    Keep updating it. There is a lot more to the situation than the numbers. Why are they bad? Why are they good? How can they misincentivize bad behavior? The situation is complex

RiderOfGiraffes 16y ago

Added to my "Great Articles" repository. I'm looking to create version 0.2 soon, incorporating the lessons I'm learning from using the current, butt-ugly pre-alpha version.