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Agreed. Why on earth would investors agree to not getting their money back? Did they get anything? It doesn’t sound like it. What are we missing here?

kenrose 6y ago
Two things come to mind. 1. At the end of the day, investors are people too. They may care that the team ends up whole. 2. 800k is non-trivial money, but it’s a small percentage of, say, a $100MM VC seed fund. The economics of VC are that some investments will net zero return. While they could have tried to claim back something here, letting go with grace gives them a lot of goodwill to be first to invest in the founder’s next project (assuming there is one).
- deleted 6y ago
  [deleted]
- mooreds 6y ago
  > letting go with grace gives them a lot of goodwill to be first to invest in the founder’s next project Also a halo effect with other people who are reading this. But I'm guessing there were some animated discussions about this. Plus, per https://news.ycombinator.com/item?id=25045874 https://news.ycombinator.com/item?id=25045874 > We've had carryover losses for years, so from a tax perspective, there was no hit on either side.
ceejayoz 6y ago
"A small but reasonable exit is life-changing for me, and a nulled-out investment is expected for you in most of your investments." Some investors are gonna be ruthless sharks. Others are not.
- lixtra 6y ago
  It might make them more attractive to the next generation of founders, especially if it is widely communicated as here. Advertising money well spent?
dimmke 6y ago
I was shocked by this too. The only thing that makes sense is that it's a form of advertising/branding for them. Baremetrics is a startup whose main audience is other startups and the posts like this have a good reach. Other startups looking into them will see this. And breaking even might be about the same as taking the thing as a loss in the grand scheme of the VC model to them. I do wonder if other lower profile companies would have gotten the same deal.
bluntfang 6y ago
tax loss harvesting

kenrose 6y ago

Two things come to mind. 1. At the end of the day, investors are people too. They may care that the team ends up whole. 2. 800k is non-trivial money, but it’s a small percentage of, say, a $100MM VC seed fund. The economics of VC are that some investments will net zero return. While they could have tried to claim back something here, letting go with grace gives them a lot of goodwill to be first to invest in the founder’s next project (assuming there is one).

deleted 6y ago
[deleted]
mooreds 6y ago
> letting go with grace gives them a lot of goodwill to be first to invest in the founder’s next project Also a halo effect with other people who are reading this. But I'm guessing there were some animated discussions about this. Plus, per https://news.ycombinator.com/item?id=25045874 https://news.ycombinator.com/item?id=25045874 > We've had carryover losses for years, so from a tax perspective, there was no hit on either side.

ceejayoz 6y ago

"A small but reasonable exit is life-changing for me, and a nulled-out investment is expected for you in most of your investments." Some investors are gonna be ruthless sharks. Others are not.

lixtra 6y ago
It might make them more attractive to the next generation of founders, especially if it is widely communicated as here. Advertising money well spent?

dimmke 6y ago

I was shocked by this too. The only thing that makes sense is that it's a form of advertising/branding for them. Baremetrics is a startup whose main audience is other startups and the posts like this have a good reach. Other startups looking into them will see this. And breaking even might be about the same as taking the thing as a loss in the grand scheme of the VC model to them. I do wonder if other lower profile companies would have gotten the same deal.

bluntfang 6y ago

tax loss harvesting