3 ms·
>> buy young firms that might challenge them This is not the worst outcome for a startup
by frozenport 4y ago
>> buy young firms that might challenge them
This is not the worst outcome for a startup
- itsgrimetime 4y agoYeah but is it good for competition?
- outside1234 4y agoNo but it is not exactly tough for the startup :)
- spaetzleesser 4y agoBut a bad outcome for the economy overall. In the medical industry this is extreme. The startup scene is basically a feeder pipeline for the big guys. Nobody even tries to start a self sustaining business.
- louniks 4y agoI wonder if this can be viewed as (yet another?) example of companies externalizing the negatives. Pollution is the classic example, both during manufacture and at the end of the lifecycle. In this case, it would be financial risk. Founders bootstrap a start-up, either with their own money or outside investors, and these folks carry all the risk. The established players can safely wait until the startup either fails or succeeds, and buy into a sure thing in the latter case.
- lotsofpulp 4y agoI think it is simply a consequence of technology enabling instant global communications and decreasing marginal costs precipitously giving bigger players an enormous advantage.
- mateo411 4y agoI'm not sure about that. An acquisition is a risky thing for a company to do as well. It's never a sure thing and correctly pricing the acquisition or predicting if the company will be successful with the acquisition is also not guaranteed or easy.
- nijave 4y agoFor some highly regulated industries, it's hard to bring small products to market. In banking, there are tiered regulations based on your size (in the U.S.) so there's more overhead for large companies
- actionablefiber 4y agoIt might be a nice payday for the founders but it's terrible for the business environment. It's basically a bribe to stop operating in that sector. Sure, it beats out Microsoft churning out the Teams to your Slack/Loop to your Notion, then rolling it into 365 and eating your enterprise market share alive without so much as a consolation prize, but as a user any time a great product hits the market, no matter how much I like it I have to worry if I can trust the company to be around for the long haul and stick to their offering.
- scarface74 4y agoThe entire “business” of startups is to get acquired. Few expect to go public.
- nonrandomstring 4y agoI think we might more accurately say; the entire “business” of some investors is to get companies acquired. That's not the same motive as seen from inside the startup. And indeed, it's only some investors. I believe there are plenty who are in it for the long game, or are far more strategic in terms of ROI.
- scarface74 4y agoOnce the startup takes investor funding, it’s irrelevant what those inside the startup want. That being said, we all go to work to exchange labor for money. It’s naive for employees to see working for any for profit company as anything more than just a financial transaction. Investors know that the chances of a startup to go public and then be profitable enough to have long term stock gains is infinitesimally small. Can you name one startup that has been really successful - ie throwing off crazy profits and margins since Facebook? Investors aren’t interested in “lifestyle businesses”.
- jdsully 4y ago> Once the startup takes investor funding, it’s irrelevant what those inside the startup want. It really depends on the ownership structure, and that will depend on leverage at the time of fundraising. YC companies are unlikely to give up control until Series B (but like all things your mileage may vary).
- riazrizvi 4y agoWe made them an offer they couldn't refuse.
- daniel-cussen 4y agoYeah I didn't get what that meant in the Godfather movie, but I got it when I read the book (which is amazing, so so good, not as good as the movie but still). It's not an offer if it can't be refused, it's just theft.
- mateo411 4y ago> it's just theft. and extortion.
- daniel-cussen 4y agoYes, both.