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> Seriously? GitHub could have easily gone out for more VC. Making it as an independent company generally involves not taking on more debt on top of a massive
by alter_eco123 8y ago
> Seriously? GitHub could have easily gone out for more VC.
Making it as an independent company generally involves not taking on more debt on top of a massive pile of debt.
What's necessary is, you know, profits and stuff.
- icedchai 8y ago1) Equity isn't debt. 2) Profits? You must be kidding. Take a look at some SaaS companies that have gone public in the last 5 years. Few are profitable. It's all about growth of revenue. The profits are way down the line.
- alter_eco123 8y ago> Take a look at some SaaS companies that have gone public in the last 5 years. Few are profitable. It's all about growth of revenue. Who's kidding? I doubt you genuinely believe we've reached a new paradigm where bankruptcy is no longer a thing.
- icedchai 8y agoCorrect. I don’t believe most of these businesses are viable long term. But that hasn’t kept me from profiting on the stocks...
- alter_eco123 8y agoGood for you. But you were ostensibly addressing the idea of making it as an independent company - not whether and when revenues and profits might suddenly matter again.
- icedchai 8y agoI believe that Github could've done their own IPO at some point. They could've "made it" as an independent company, in that respect, without profits...
- alter_eco123 8y agoAnd after the proceeds from the IPO have been spent?
- icedchai 8y agoThe great think about equity is you can keep issuing more of it, doing secondary offerings, diluting existing stockholders, and raising more money until your stock price has gone to zero. That takes decades.
- compcoffee 8y ago>Few are profitable. It's all about growth of revenue. The profits are way down the line. We are officially well on our way to 1999 bubble territory! Nothing matters but revenue growth, even if you're selling dollars for 50 cents.
- s73v3r_ 8y agoEquity is absolutely a form of debt, especially when given to the kinds of VCs that demand high exits. Maybe if there were VCs who would be happy to own part of the company and be satisfied with the dividends from Github's revenue, it'd be a different story.
- icedchai 8y agoMaybe startups should go out and get true debt financing, then they don't have to give up that valuable stock? Oh, wait a minute, they generally can't because they have no real assets to borrow against. No, equity is not debt.