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Profitability - but VCs don't give a shit about that - in fact one told me that right on the phone... Maybe things will change.

by suking 15y ago

jpdoctor 15y ago
That should not be surprising: Profitability makes VCs less necessary, which gives you leverage to walk away from a term sheet. Google was a great example of that.
- joshu 15y ago
  How so? Google raised a bunch of cash at the beginning.
  - jpdoctor 15y ago
    There was an angel round early, but when it came time for KP and Sequoia to enter, the dynamics were quite interesting. The company retained an enormous chunk of the ownership in part because they could (already!) walk away if they needed to.
    - joshu 15y ago
      I don't believe they had revenue at that point.
    - shadowsun7 15y ago
      They didn't have revenue at that point. In fact, they were close to going bankrupt a couple of years later, before Adsense kicked in. Source: In The Plex; also see Ron Conway's speech at Startup School 2010
      - deleted 15y ago
        [deleted]
      - jpdoctor 15y ago
        > They didn't have revenue at that point. Not correct.
        shadowsun7 15y ago
        Sources please.
- viscanti 15y ago
  Google didn't gain a competitive advantage because they were profitable early (they were profitable, but only marginally so). They had an advantage because of the traction (significant year over year growth) they had as well as their ability to scale economically. If Google didn't raise big money, they wouldn't have went on to do as many early acquisitions. Without those acquisitions, they don't stumble onto adwords/adsense and they remain a mildly profitable company.
  - cppsnob 15y ago
    > If Google didn't raise big money, they wouldn't have went on to do as many early acquisitions. Without those acquisitions, they don't stumble onto adwords/adsense Adwords was out for around 6 months before the company's very first acquisition, DejaNews. http://www.google.com/about/corporate/company/history.html http://www.google.com/about/corporate/company/history.html Google quickly became insanely profitable after launching adwords. They only ever took $25MM in private funding. http://en.wikipedia.org/wiki/History_of_Google#Financing_and_initial_public_offering http://en.wikipedia.org/wiki/History_of_Google#Financing_and... I'm curious as to how you arrived at the assertions you made.
    - viscanti 15y ago
      Fair enough, that's a valid question. I arrived at my assertion by looking at the financials. http://investor.google.com/financial/2005/tables.html http://investor.google.com/financial/2005/tables.html Google make the vast majority of their money through ads (no surprise). Adwords didn't take off until they acquired Applied Semantics (for semantic processing) and Sprinks (contextual aware ads). It may have existed pre-acquisitions, but it didn't look anything like the current version, and wasn't anywhere near as profitable.
  - jpdoctor 15y ago
    > (they were profitable, but only marginally so) That is the point. It is why Larry and Sergey retained such a percentage of the company in the A round; They had an alternative.

Profitability - but VCs don't give a shit about that - in fact one told me that right on the phone... Maybe things will change.

by suking 15y ago

Profitability - but VCs don't give a shit about that - in fact one told me that right on the phone... Maybe things will change.

jpdoctor 15y ago

That should not be surprising: Profitability makes VCs less necessary, which gives you leverage to walk away from a term sheet. Google was a great example of that.

joshu 15y ago
How so? Google raised a bunch of cash at the beginning.
- jpdoctor 15y ago
  There was an angel round early, but when it came time for KP and Sequoia to enter, the dynamics were quite interesting. The company retained an enormous chunk of the ownership in part because they could (already!) walk away if they needed to.
  - joshu 15y ago
    I don't believe they had revenue at that point.
  - shadowsun7 15y ago
    They didn't have revenue at that point. In fact, they were close to going bankrupt a couple of years later, before Adsense kicked in. Source: In The Plex; also see Ron Conway's speech at Startup School 2010
    - deleted 15y ago
      [deleted]
    - jpdoctor 15y ago
      > They didn't have revenue at that point. Not correct.
      - shadowsun7 15y ago
        Sources please.
viscanti 15y ago
Google didn't gain a competitive advantage because they were profitable early (they were profitable, but only marginally so). They had an advantage because of the traction (significant year over year growth) they had as well as their ability to scale economically. If Google didn't raise big money, they wouldn't have went on to do as many early acquisitions. Without those acquisitions, they don't stumble onto adwords/adsense and they remain a mildly profitable company.
- cppsnob 15y ago
  > If Google didn't raise big money, they wouldn't have went on to do as many early acquisitions. Without those acquisitions, they don't stumble onto adwords/adsense Adwords was out for around 6 months before the company's very first acquisition, DejaNews. http://www.google.com/about/corporate/company/history.html http://www.google.com/about/corporate/company/history.html Google quickly became insanely profitable after launching adwords. They only ever took $25MM in private funding. http://en.wikipedia.org/wiki/History_of_Google#Financing_and_initial_public_offering http://en.wikipedia.org/wiki/History_of_Google#Financing_and... I'm curious as to how you arrived at the assertions you made.
  - viscanti 15y ago
    Fair enough, that's a valid question. I arrived at my assertion by looking at the financials. http://investor.google.com/financial/2005/tables.html http://investor.google.com/financial/2005/tables.html Google make the vast majority of their money through ads (no surprise). Adwords didn't take off until they acquired Applied Semantics (for semantic processing) and Sprinks (contextual aware ads). It may have existed pre-acquisitions, but it didn't look anything like the current version, and wasn't anywhere near as profitable.
- jpdoctor 15y ago
  > (they were profitable, but only marginally so) That is the point. It is why Larry and Sergey retained such a percentage of the company in the A round; They had an alternative.