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Did he make so little money from digg that he needs to raise funding to get $1m for his new start-up?

by ido 16y ago

pmjordan 16y ago
Startups are (very) high-risk investments. I doubt he's quite that wealthy that $1m is peanuts to him, so taking outside investment seems like a good idea.
Zev 16y ago
You typically get more than cash when you raise a round of funding.
dusing 16y ago
What cash has he made from digg? What is his share of the company now?
raganwald 16y ago
Even if he can afford to do the whole thing himself, remember the old adage: If you need advice, ask for money. If you need money, ask for advice. He may have raised money specifically to bring in some investors who can contribute some wisdom and experience.
Stormbringer 16y ago
There's a thing that happens a lot with tech company growth stocks. Digg is a case in point, where they grow fast, and on the way up they get several offers, but they keep holding out for more and more... until suddenly their exponential growth crashes to a halt, and the big offers suddenly dry up. The trick is to sell on the way up, not when you're at the top. You're at 'the top' for such a vanishingly small period of time that the odds of selling at the perfect time are vanishingly small. I seem to recall Digg over the years while it was still growing getting (and knocking back) offers of 30, 60, and ~100 million before the famous Google 200 fell through. I understand the urge to push hard and get everything you can for a deal, but if at $200 million the other guy feels that there's nothing in it for him, that it is strictly break even, then maybe at the last minute the deal falls through, and you kick yourself a year later for not selling at $180MM or even $150MM. Yes, you should negotiate hard, but you should always leave something on the table for the other guy. Even if you're completely screwing him over a barrel, you should still leave him something for him to brag about to his buddies or board of directors or journos.

Did he make so little money from digg that he needs to raise funding to get $1m for his new start-up?

by ido 16y ago

Did he make so little money from digg that he needs to raise funding to get $1m for his new start-up?

Startups are (very) high-risk investments. I doubt he's quite that wealthy that $1m is peanuts to him, so taking outside investment seems like a good idea.

Zev 16y ago

You typically get more than cash when you raise a round of funding.

dusing 16y ago

What cash has he made from digg? What is his share of the company now?

raganwald 16y ago

Even if he can afford to do the whole thing himself, remember the old adage: If you need advice, ask for money. If you need money, ask for advice. He may have raised money specifically to bring in some investors who can contribute some wisdom and experience.

Stormbringer 16y ago

There's a thing that happens a lot with tech company growth stocks. Digg is a case in point, where they grow fast, and on the way up they get several offers, but they keep holding out for more and more... until suddenly their exponential growth crashes to a halt, and the big offers suddenly dry up. The trick is to sell on the way up, not when you're at the top. You're at 'the top' for such a vanishingly small period of time that the odds of selling at the perfect time are vanishingly small. I seem to recall Digg over the years while it was still growing getting (and knocking back) offers of 30, 60, and ~100 million before the famous Google 200 fell through. I understand the urge to push hard and get everything you can for a deal, but if at $200 million the other guy feels that there's nothing in it for him, that it is strictly break even, then maybe at the last minute the deal falls through, and you kick yourself a year later for not selling at $180MM or even $150MM. Yes, you should negotiate hard, but you should always leave something on the table for the other guy. Even if you're completely screwing him over a barrel, you should still leave him something for him to brag about to his buddies or board of directors or journos.