4 ms·

Why exit is thought of as a success? It's kind of like a pump and dump scheme. Does it mean founders suddenly lose their vision and abandon their customers to

Why exit is thought of as a success? It's kind of like a pump and dump scheme. Does it mean founders suddenly lose their vision and abandon their customers to become an actual product for shareholders?

tinco 5y ago
It is a success because it is a concrete milestone that shows the founders have fulfilled their roles to satisfaction. An exit is not the only success, you could also simply transition into being a successful private company, but then there's no clear finish line. Now it is clear, no can argue the founders success, it's written in black and white and made public for all to see, they achieved an undeniably great thing. Customers are always a product for shareholders, that doesn't suddenly change when a company is sold to other shareholders. And anyway, it could be a good thing, obviously Etsy has great experience with taking care of their customers and their partners and with running a huge business. Who says anyone was abandoned?
- Judgmentality 5y ago
  > Now it is clear, no can argue the founders success, it's written in black and white and made public for all to see, they achieved an undeniably great thing. No one can argue the founders' successful profit. I know nothing about this company and have no opinion on it one way or the other, but I know companies that are borderline fraudulent (and I am aware that is a strong claim) that are going public via SPACs and the founders are getting rich despite not having a product or paying customers.
arkitaip 5y ago
They have exactly 1.63B reasons to sell. You don't get to judge them with zero insight into their business and visions for their lives.
- ashtonkem 5y ago
  Also, I would openly laugh at anyone who claims that they’d personally turn down 1.63B to keep their business pure. That is an overwhelming amount of money, in the “none of your descendants needs to work” range. I’d sell out for much, much less money.
  - chevill 5y ago
    On the contrary if I ever built a business that was worth 100 million or more I'd take far less than my share of it if it meant that I could get a clean exit and not have to stay on as an executive for a few years. Perhaps my mentality is part of the reason why I will never build such a thing.
  - marc__1 5y ago
    Apparently there were many other billion dollar acquisition bids turned down Mark Zuckerberg Turned Down Yahoo's $1 Billion https://www.inc.com/allison-fass/peter-thiel-mark-zuckerberg-luck-day-facebook-turned-down-billion-dollars.html https://www.inc.com/allison-fass/peter-thiel-mark-zuckerberg... Discord reportedly rejects Microsoft's $12 billion acquisition offer https://www.newsbytesapp.com/news/business/microsoft-12-billion-discord-acquisition-fizzles-out/story https://www.newsbytesapp.com/news/business/microsoft-12-bill... Amazon and Alibaba have approached 5-year-old startup Wish, but the CEO seems to want more than $10 billion https://www.businessinsider.com/wish-rumored-to-reject-acquisition-offers-from-amazon-and-alibaba-2015-11?op=1 https://www.businessinsider.com/wish-rumored-to-reject-acqui...
    - CyberDildonics 5y ago
      Mark Zuckerberg also turned down a $15 Billion dollar offer from Microsoft.
    - alksjdalkj 5y ago
      But there's a difference between turning down a bid because you want to maintain control over your vision and because you think your company is just worth more than the offer. The point is just that if you get what you think is a fair offer, and it's a very large offer, it would be hard for most people to say no.
- richardwhiuk 5y ago
  Not all of that money will go to the founders.
  - andrewingram 5y ago
    Most of it won't, there's only one founder and from what I understand his share is less than what you'd expect. I imagine all the early employees did pretty well from this though.
purple_ferret 5y ago
because they suddenly have tens of millions in their and their shareholders' pocket. Let someone else worry about growth as you cash out
numair 5y ago
This is actually a very valid question. Every situation is different — usually I’d agree with you, and I actually hesitated when describing the success as due to the exit. In this case, however, the exit is likely due to the ability for the combined entity to execute the original vision better than before, and it also allows us to put a dollar number on the value of a space / business that unsophisticated bystanders continue to dismiss as “not a real business” (even on this page!). That makes it a net win for the overall resale platform / circular commerce ecosystem, and makes future innovation in this space easier to finance. A similar situation occurred with the acquisition of MySpace, which immediately boosted the value of all the other social networks at the time — the space had gone from being a bunch of “worthless websites,” to important next-gen media platforms that might crown the next emperor. Recruitment/funding/etc became a LOT easier after that.
derefr 5y ago
The context of the parent comment is what investors think. Investors — especially VCs — like acquisitions; they get them paid out at the 10x they were looking for, within their fund's time-horizon.

tinco 5y ago

It is a success because it is a concrete milestone that shows the founders have fulfilled their roles to satisfaction. An exit is not the only success, you could also simply transition into being a successful private company, but then there's no clear finish line. Now it is clear, no can argue the founders success, it's written in black and white and made public for all to see, they achieved an undeniably great thing. Customers are always a product for shareholders, that doesn't suddenly change when a company is sold to other shareholders. And anyway, it could be a good thing, obviously Etsy has great experience with taking care of their customers and their partners and with running a huge business. Who says anyone was abandoned?

Judgmentality 5y ago
> Now it is clear, no can argue the founders success, it's written in black and white and made public for all to see, they achieved an undeniably great thing. No one can argue the founders' successful profit. I know nothing about this company and have no opinion on it one way or the other, but I know companies that are borderline fraudulent (and I am aware that is a strong claim) that are going public via SPACs and the founders are getting rich despite not having a product or paying customers.

arkitaip 5y ago

They have exactly 1.63B reasons to sell. You don't get to judge them with zero insight into their business and visions for their lives.

ashtonkem 5y ago
Also, I would openly laugh at anyone who claims that they’d personally turn down 1.63B to keep their business pure. That is an overwhelming amount of money, in the “none of your descendants needs to work” range. I’d sell out for much, much less money.
- chevill 5y ago
  On the contrary if I ever built a business that was worth 100 million or more I'd take far less than my share of it if it meant that I could get a clean exit and not have to stay on as an executive for a few years. Perhaps my mentality is part of the reason why I will never build such a thing.
- marc__1 5y ago
  Apparently there were many other billion dollar acquisition bids turned down Mark Zuckerberg Turned Down Yahoo's $1 Billion https://www.inc.com/allison-fass/peter-thiel-mark-zuckerberg-luck-day-facebook-turned-down-billion-dollars.html https://www.inc.com/allison-fass/peter-thiel-mark-zuckerberg... Discord reportedly rejects Microsoft's $12 billion acquisition offer https://www.newsbytesapp.com/news/business/microsoft-12-billion-discord-acquisition-fizzles-out/story https://www.newsbytesapp.com/news/business/microsoft-12-bill... Amazon and Alibaba have approached 5-year-old startup Wish, but the CEO seems to want more than $10 billion https://www.businessinsider.com/wish-rumored-to-reject-acquisition-offers-from-amazon-and-alibaba-2015-11?op=1 https://www.businessinsider.com/wish-rumored-to-reject-acqui...
  - CyberDildonics 5y ago
    Mark Zuckerberg also turned down a $15 Billion dollar offer from Microsoft.
  - alksjdalkj 5y ago
    But there's a difference between turning down a bid because you want to maintain control over your vision and because you think your company is just worth more than the offer. The point is just that if you get what you think is a fair offer, and it's a very large offer, it would be hard for most people to say no.
richardwhiuk 5y ago
Not all of that money will go to the founders.
- andrewingram 5y ago
  Most of it won't, there's only one founder and from what I understand his share is less than what you'd expect. I imagine all the early employees did pretty well from this though.

purple_ferret 5y ago

because they suddenly have tens of millions in their and their shareholders' pocket. Let someone else worry about growth as you cash out

numair 5y ago

This is actually a very valid question. Every situation is different — usually I’d agree with you, and I actually hesitated when describing the success as due to the exit. In this case, however, the exit is likely due to the ability for the combined entity to execute the original vision better than before, and it also allows us to put a dollar number on the value of a space / business that unsophisticated bystanders continue to dismiss as “not a real business” (even on this page!). That makes it a net win for the overall resale platform / circular commerce ecosystem, and makes future innovation in this space easier to finance. A similar situation occurred with the acquisition of MySpace, which immediately boosted the value of all the other social networks at the time — the space had gone from being a bunch of “worthless websites,” to important next-gen media platforms that might crown the next emperor. Recruitment/funding/etc became a LOT easier after that.

derefr 5y ago

The context of the parent comment is what investors think. Investors — especially VCs — like acquisitions; they get them paid out at the 10x they were looking for, within their fund's time-horizon.