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> 1280 Companies[1] — 1 IPO > Kingmakers... hardly. An IPO is not the only measure of success. Some successful YC companies are opting to remain private longe

by asaph 9y ago

> 1280 Companies[1] — 1 IPO > Kingmakers... hardly. An IPO is not the only measure of success. Some successful YC companies are opting to remain private longer e.g. AirBnB, Coinbase and some have been acquired e.g. Heroku, Reddit.

joeblau 9y ago
Being acquired or acqui-hired(soft landing) means the company (and probably the culture) is gone. I worked at BBN Technologies back in the mid 2000's. This is the company that co-founded the internet, they have the second domain name ever registered (bbn.com)[1], their engineers co-invented foundational technologies that make the internet work today. In 2009, they were acquired by Raytheon[2]. As a stand alone company, BBN was not able to generate sustainable value, but Raytheon as the prime contractor is able to. Also, being private longer but losing money is not sustainable. If companies are private and profitable, then that's a different story. AirBnB is still raising money[3] and their valuation is almost too big for them to get acquired. Their only successful exit is an IPO or becoming so profitable that they can buy out their investors. Coinbase is making a killing so they might be sustainable especially with the growth of the cryptocurrency market over the past 2-3 years (And the fees they keep charging me). SalesForce & Condé Nast have generated more value out of Heorku and Reddit than YC. Don't get me wrong — I love YC products. I stayed at an AirBnB in March in Vancouver, I bought some Ethereum today on Coinbase, I updated a site I maintain[4] which has been running on a free Heroku Dyno for 5 years+ and my Reddit birthday is January 19, 2010. YC companies have the same challenges that everyone else has even with their power and influence. There needs to be more of a track record of YC companies succeeding disproportionally to other companies before I could classify them as kingmakers. [1] - https://en.wikipedia.org/wiki/List_of_the_oldest_currently_registered_Internet_domain_names https://en.wikipedia.org/wiki/List_of_the_oldest_currently_r... [2] - https://www.raytheon.com/ourcompany/bbn/ https://www.raytheon.com/ourcompany/bbn/ [3] - https://www.crunchbase.com/organization/airbnb/funding_rounds/funding_rounds_list https://www.crunchbase.com/organization/airbnb/funding_round... [4] - https://gitignore.io https://gitignore.io
- nl 9y ago
  I’d note the article specifically says when AirBnB is planning to IPO. Private market valuations are more risky than public markets, but it isn’t 2008 anymore, and the ecosystem of large funds funding large growth rounds is well understood now.
- stale2002 9y ago
  > Being acquired or acqui-hired(soft landing) means the company (and probably the culture) is gone. So what? An exit is an exit, as it means the investor gets their money. The one and only metric to look at is total value or total returns on investment.
  - dsacco 9y ago
    An aquihire is not always a positive exit. More generally, not all liquidity events are positive outcomes for all parties involved, including investors. Many exits are agreed to by all parties to cut their losses and recoup some amount of the original investment.
  - joeblau 9y ago
    An exit is not an exit for everyone. In a lot of cases, employees are investors too and sometimes acquihires are only wins for people that own preferred stock (vC's, founders), not common stock.

by asaph 9y ago

joeblau 9y ago

Being acquired or acqui-hired(soft landing) means the company (and probably the culture) is gone. I worked at BBN Technologies back in the mid 2000's. This is the company that co-founded the internet, they have the second domain name ever registered (bbn.com)[1], their engineers co-invented foundational technologies that make the internet work today. In 2009, they were acquired by Raytheon[2]. As a stand alone company, BBN was not able to generate sustainable value, but Raytheon as the prime contractor is able to. Also, being private longer but losing money is not sustainable. If companies are private and profitable, then that's a different story. AirBnB is still raising money[3] and their valuation is almost too big for them to get acquired. Their only successful exit is an IPO or becoming so profitable that they can buy out their investors. Coinbase is making a killing so they might be sustainable especially with the growth of the cryptocurrency market over the past 2-3 years (And the fees they keep charging me). SalesForce & Condé Nast have generated more value out of Heorku and Reddit than YC. Don't get me wrong — I love YC products. I stayed at an AirBnB in March in Vancouver, I bought some Ethereum today on Coinbase, I updated a site I maintain[4] which has been running on a free Heroku Dyno for 5 years+ and my Reddit birthday is January 19, 2010. YC companies have the same challenges that everyone else has even with their power and influence. There needs to be more of a track record of YC companies succeeding disproportionally to other companies before I could classify them as kingmakers. [1] - https://en.wikipedia.org/wiki/List_of_the_oldest_currently_registered_Internet_domain_names https://en.wikipedia.org/wiki/List_of_the_oldest_currently_r... [2] - https://www.raytheon.com/ourcompany/bbn/ https://www.raytheon.com/ourcompany/bbn/ [3] - https://www.crunchbase.com/organization/airbnb/funding_rounds/funding_rounds_list https://www.crunchbase.com/organization/airbnb/funding_round... [4] - https://gitignore.io https://gitignore.io

nl 9y ago
I’d note the article specifically says when AirBnB is planning to IPO. Private market valuations are more risky than public markets, but it isn’t 2008 anymore, and the ecosystem of large funds funding large growth rounds is well understood now.
stale2002 9y ago
> Being acquired or acqui-hired(soft landing) means the company (and probably the culture) is gone. So what? An exit is an exit, as it means the investor gets their money. The one and only metric to look at is total value or total returns on investment.
- dsacco 9y ago
  An aquihire is not always a positive exit. More generally, not all liquidity events are positive outcomes for all parties involved, including investors. Many exits are agreed to by all parties to cut their losses and recoup some amount of the original investment.
- joeblau 9y ago
  An exit is not an exit for everyone. In a lot of cases, employees are investors too and sometimes acquihires are only wins for people that own preferred stock (vC's, founders), not common stock.