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Social network creator Ning raising $70M at $560M valuation
- reitzensteinm 18y agoSplitting hairs a bit, but Marc says $60m: http://feeds.feedburner.com/~r/pmarca/~3/273226506/ning-news-serie.html http://feeds.feedburner.com/~r/pmarca/~3/273226506/ning-news...
- fallentimes 18y agonet investment banker fees
- reitzensteinm 18y agoAh. Should have studied finance. :)
- fallentimes 18y agohaha believe me it wasn't worth it
- DocSavage 18y agoThe investment bankers who got the missing $10 million might differ in that opinion :)
- fallentimes 18y agotouche - but not the lower level analysts who worked 100 hours a week at essentially McDonald's manager wages (100k per year divided by 50 weeks divided by 100 hours per week = $20 per hour), staring at TPS reports, pitchbooks and never ending excel schedules. which unfortunately would be my level.
- neilc 18y agoI thought Marc A's comment at the end of the article was interesting: We raised the money to enable us to keep scaling given our accelerating growth ... and to make sure we have plenty of firepower to survive the oncoming nuclear winter. At current growth rates, we don’t need it to get to cash flow positive, but having lived through the last crunch, it’s good to be conservative with these things. Which is at least a reasonable justification for getting so over-capitalized: get the money while it can be gotten for cheap, don't burn through it, and use the cash reserve to survive the downtown Marc A. is predicting.
- gojomo 18y agoYes, "pmarca expects a 'nuclear winter'" is almost a headline-worthy item itself.
- wehriam 18y agoWhy aren't they "cash flow positive"? How do you spend $44 million and not make money? I'm not being rhetorical, I admire what Ning is doing.
- icky 18y ago> How do you spend $44 million and not make money? Investing in Ning? ;)
- wanorris 18y agoThey must be investing in some enormous infrastructure. Server farms, international markets, maybe Akamai. But in general, it's not uncommon for companies that raise a lot of capital for rapid growth to not be profitable. Back in AOL's heyday, they had huge revenue growth, but they were reinvesting it in customer acquisition so fast that they never started to make money until their growth slowed down. This also happened in the retail boom in the 80s with companies like Home Depot and Staples. They kept building out more stores, which cost them more money than they were making. Having said all that, I really fail to understand valuing Ning at half a billion dollars. It seems like a useful thing, but only an incremental improvement over, say, Yahoo Groups.