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That’s sad to hear given as I’m looking to raise funds but also hoping to build a distributed team given the abundance of worldwide talent. Does this change yo

That’s sad to hear given as I’m looking to raise funds but also hoping to build a distributed team given the abundance of worldwide talent. Does this change your strategy somewhat in that it limits your access to capital which forces you to look at profitability sooner?

sytse 8y ago
I think you can raise a comparable amount of funds for a distributed team, it will just be with fewer investors and at a lower valuation. The valuation will be lower since an acquisition is less likely. Most acquirers of companies under $100m want the acquired employees to join their office. Since this is unlikely with a distributed team there will be a discount on the acquisition price of up to 50%. There was an upside to this. Since distributed companies make for a less valuable acquisition target our investors are aligned with our plan to become a public company https://about.gitlab.com/strategy/#sequence- https://about.gitlab.com/strategy/#sequence- For public companies being remote is less of an issue since financial metrics are much more important and in the case of an acquisition they would likely stay as a separate entity.
- tixocloud 8y ago
  This will be a challenge for me as my investors already feel the company has the potential to be an acquisition target for one of the big guys and feels we should be building it that way. We’re also based in the U.K. and am not sure how many Saas platform tech companies become public.
  - sytse 8y ago
    You will have to get to a liquidity event, 99% of the time this is an acquisition or going public. It is not very motivating for you and the team to build for an acquisition. If you want to go that route be careful how much you raise, every pounds has to paid back 3 to 10 times.
    - tixocloud 8y ago
      Which is why I have a slight headache. I’m really impressed and what you guys have done and am extremely interested in your journey so far. Would you be able to spare me 10 mins for a quick chat? I’m a first time founder and really want to learn as much as I can so I don’t screw it all up.
bsder 8y ago
> That’s sad to hear given as I’m looking to raise funds but also hoping to build a distributed team given the abundance of worldwide talent. Are you looking for VC funding or angel funding? If you have the ability to use foreign teams, you are probably better off taking angel funding and bootstrapping. Remember, VC's want "up or out". "Cheap remote workers" isn't really relevant to that to a first approximation. In fact, some VC's will look at it as a detriment. They wanted you to spend that couple million and succeed or go up in smoke. With cheap remote workers, you look at that couple million as 3+ years of runway for really solid organic growth.
- AYBABTME 8y ago
  "cheap remote workers" isn't quite the point, it's more access to talent that's not geographically next to you. I know it's not your main point but I just wanted to add this note. :) Most companies who do remote and are successful at it, don't pay a discount on employees. In fact in many cases the pay is very competitive with SF/NY standards.
  - tixocloud 8y ago
    Exactly why we want to do remote. I find our concept is hard to parse amongst the talent in our geographic area whereas I’ve found folks across the world who completely get it and would like to help.
- tixocloud 8y ago
  At the moment, embedded myself into an incubator. Haven’t really found any angel investors who would be willing to give us some runway as I don’t think many here get what we do. But it is a good thought and something to consider if things don’t pan out.
- unusximmortalis 8y ago
  Good "cheap workers" either remote or in office don't exist anymore, and it is normal to be like that. You have to change your thinking.

sytse 8y ago

I think you can raise a comparable amount of funds for a distributed team, it will just be with fewer investors and at a lower valuation. The valuation will be lower since an acquisition is less likely. Most acquirers of companies under $100m want the acquired employees to join their office. Since this is unlikely with a distributed team there will be a discount on the acquisition price of up to 50%. There was an upside to this. Since distributed companies make for a less valuable acquisition target our investors are aligned with our plan to become a public company https://about.gitlab.com/strategy/#sequence- https://about.gitlab.com/strategy/#sequence- For public companies being remote is less of an issue since financial metrics are much more important and in the case of an acquisition they would likely stay as a separate entity.

tixocloud 8y ago
This will be a challenge for me as my investors already feel the company has the potential to be an acquisition target for one of the big guys and feels we should be building it that way. We’re also based in the U.K. and am not sure how many Saas platform tech companies become public.
- sytse 8y ago
  You will have to get to a liquidity event, 99% of the time this is an acquisition or going public. It is not very motivating for you and the team to build for an acquisition. If you want to go that route be careful how much you raise, every pounds has to paid back 3 to 10 times.
  - tixocloud 8y ago
    Which is why I have a slight headache. I’m really impressed and what you guys have done and am extremely interested in your journey so far. Would you be able to spare me 10 mins for a quick chat? I’m a first time founder and really want to learn as much as I can so I don’t screw it all up.

bsder 8y ago

> That’s sad to hear given as I’m looking to raise funds but also hoping to build a distributed team given the abundance of worldwide talent. Are you looking for VC funding or angel funding? If you have the ability to use foreign teams, you are probably better off taking angel funding and bootstrapping. Remember, VC's want "up or out". "Cheap remote workers" isn't really relevant to that to a first approximation. In fact, some VC's will look at it as a detriment. They wanted you to spend that couple million and succeed or go up in smoke. With cheap remote workers, you look at that couple million as 3+ years of runway for really solid organic growth.

AYBABTME 8y ago
"cheap remote workers" isn't quite the point, it's more access to talent that's not geographically next to you. I know it's not your main point but I just wanted to add this note. :) Most companies who do remote and are successful at it, don't pay a discount on employees. In fact in many cases the pay is very competitive with SF/NY standards.
- tixocloud 8y ago
  Exactly why we want to do remote. I find our concept is hard to parse amongst the talent in our geographic area whereas I’ve found folks across the world who completely get it and would like to help.
tixocloud 8y ago
At the moment, embedded myself into an incubator. Haven’t really found any angel investors who would be willing to give us some runway as I don’t think many here get what we do. But it is a good thought and something to consider if things don’t pan out.
unusximmortalis 8y ago
Good "cheap workers" either remote or in office don't exist anymore, and it is normal to be like that. You have to change your thinking.