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A huge crash in crypto prices is a great thing for people working on regular old startup/Saas cash flow businesses. A lot of potential investment and a modest a

A huge crash in crypto prices is a great thing for people working on regular old startup/Saas cash flow businesses. A lot of potential investment and a modest amount of talent has been siphoned out of the real productive economy into the crypto ponzi zone. I for one am excited that I will never need to think about some BS "tokenomics" story for my startup to sell to some investor and I am looking for a return to VCs that invest in businesses with solid growth, unit economics, and cashflow.

LBJsPNS 4y ago
"I am looking for a return to VCs that invest in businesses with solid growth, unit economics, and cashflow." I'd like a pony while you're at it.
scarface74 4y ago
Yes because startups outside of crypto have had profitable business models for the last decade. Most of the non crypto companies were not profitable when they IPOd the last few years and many still are barely profitable.
- afavour 4y ago
  And how were crypto startups better in any meaningful way?
  - redox99 4y ago
    They probably made actual money even if it was through scams. Which is what the VC wants after all.
    - stiltzkin 4y ago
      Andreessen Horowitz (a16z) agrees.
- bearjaws 4y ago
  Significant improvement from crypto companies that only fundamental reason for having any money was memes and bad financial policies.
- anon2020dot00 4y ago
  Difference is that, from the outside perspective, majority of the activity around crypto are just scams while at least other companies try to solve a real-world problem.
  - scarface74 4y ago
    Let’s take DoorDash for instance. They couldn’t make a profit on food delivery during a world wide pandemic when everyone was ordering in and staying at home. We can say the same about companies that made open source software and we’re going to make money via “services or supper contracts”. That hasn’t worked out well for mLabs or ElasticCo. Most startups are just Ponzi schemes.
    - pavlov 4y ago
      Elastic is a Ponzi because they make one of the most useful databases in the world, have hundreds of millions in revenue from satisfied customers, but haven’t completely figured out the monetization? The crypto whataboutist apologies are something else.
      - scarface74 4y ago
        “They are for profit business that hasn’t figured out how to make a profit in a decade” Sounds like a good investment to me.
        alphabettsy 4y ago
        Maybe or Maybe not, but it took Tesla more than 15 years. Amazon took 10.
        scarface74 4y ago
        Two differences: 1. Amazon had positive margins early on and was reinvesting money to build infrastructure and real assets. Most startups aren’t. All Bezos had to do to turn a profit at any time is stop building warehouses. 2. Amazon completely pivoted and almost all of its profit comes from AWS. And no Amazon did not use excess capacity to start AWS. It was built from the ground up as a separate service [1]. Every company likes to point to Amazon and say we can do it too. That’s just like a company claiming if they bring their former CEO back after 10 years they can become a three trillion dollar company. And standard disclaimer since you brought up Amazon, I work at AWS. [1] https://readwrite.com/popping-the-amazon-web-services-capacity-myth/ https://readwrite.com/popping-the-amazon-web-services-capaci...
derefr 4y ago
If you have solid growth, unit economics, and cashflow, you don't need VCs; you can just get a business loan from a bank. Or do an IPO.
- moralestapia 4y ago
  Or still talk to VCs, but leverage is on your side now.
- corybrown 4y ago
  "just"
  - derefr 4y ago
    No “just” about it; with those things in place, getting a business loan is far simpler than getting a VC to invest in you. To a (big) bank, your business is just an entity with a credit score. That credit score is based on those factors you listed. No weeks/months of glad-handing and human-factors evaluation like VCs do; hand a bank the data, they plug-and-chug, and you either get a loan or you don’t.
    - randomsearch 4y ago
      Banks are insanely risk averse. VC fundraising can be faster, simpler, and is possible when banks won’t go near you.
      - derefr 4y ago
        Yes, and? We're talking specifically about companies that have "solid growth, unit economics, and cashflow" — i.e. which have a stable business model + revenue engine. Businesses that have been de-risked. Businesses where the only reason they're not bigger already, is that they need money to throw into the coal furnace to power the train up the hockey-stick hill. At that stage of a business, you wouldn't be taking seed-stage or series-A funding; it'd be series-B or series-C — where the type of investors who do those investments are just as risk-averse as banks, and are looking at essentially the same things banks look at. At that stage of a business, you know there isn't anything on the horizon that'll kill your share price. Your market cap is stable (save for the growth you're trying to enable.) So you should be extremely wary to let go of any more equity. You should highly prefer debt-backed investment (i.e. loans) over equity-backed investment, because your equity value increase from the growth should be predictably paying off that debt, and then some, likely the same fiscal year you take on the loan. Selling any equity at that period in a company's growth is throwing earnings down the drain.
senttoschool 4y ago
Yes, this. Can't imagine how many very talented people I know have gone into helping crypto scams.
- pavlov 4y ago
  When evaluating engineering candidates, a résumé showing time spent in crypto in excess of six months is going to be a giant red flag and default no-hire for me.
  - n42 4y ago
    This is short sighted and I will happily hire the talent you are missing out on
    - pavlov 4y ago
      I’ll be sure to give them your HN username.
      - bergenty 4y ago
        I’ll take them as well, thank you.
        miracle2k 4y ago
        Send some my way too.
  - ThalesX 4y ago
    I find myself working in the web3 space despite not being a fan of crypto (quite the contrary). What I have helped implement working in this space touches on distributed & decentralized systems, edge computing, cryptography and I could probably name a few more technically interesting areas. Actually made use of those trees, graphs and associated algorithms that you see popping up in coding interviews, after which you never hear about them again. While I respect your decision, if we are talking about technical exposure to interesting challenges, I think you're leaving a lot on the table by defaulting to no-hire.
junofan 4y ago
It’s tough to raise for niche B2B SaaS right now. As a category these are businesses that aren’t productive enough for Microsoft/Google/Amazon’s time to enter. So there’s a ceiling.
lvl102 4y ago
So what are we building with Rust now? I kid.

LBJsPNS 4y ago

"I am looking for a return to VCs that invest in businesses with solid growth, unit economics, and cashflow." I'd like a pony while you're at it.

scarface74 4y ago

Yes because startups outside of crypto have had profitable business models for the last decade. Most of the non crypto companies were not profitable when they IPOd the last few years and many still are barely profitable.

afavour 4y ago
And how were crypto startups better in any meaningful way?
- redox99 4y ago
  They probably made actual money even if it was through scams. Which is what the VC wants after all.
  - stiltzkin 4y ago
    Andreessen Horowitz (a16z) agrees.
bearjaws 4y ago
Significant improvement from crypto companies that only fundamental reason for having any money was memes and bad financial policies.
anon2020dot00 4y ago
Difference is that, from the outside perspective, majority of the activity around crypto are just scams while at least other companies try to solve a real-world problem.
- scarface74 4y ago
  Let’s take DoorDash for instance. They couldn’t make a profit on food delivery during a world wide pandemic when everyone was ordering in and staying at home. We can say the same about companies that made open source software and we’re going to make money via “services or supper contracts”. That hasn’t worked out well for mLabs or ElasticCo. Most startups are just Ponzi schemes.
  - pavlov 4y ago
    Elastic is a Ponzi because they make one of the most useful databases in the world, have hundreds of millions in revenue from satisfied customers, but haven’t completely figured out the monetization? The crypto whataboutist apologies are something else.
    - scarface74 4y ago
      “They are for profit business that hasn’t figured out how to make a profit in a decade” Sounds like a good investment to me.
      - alphabettsy 4y ago
        Maybe or Maybe not, but it took Tesla more than 15 years. Amazon took 10.
        scarface74 4y ago
        Two differences: 1. Amazon had positive margins early on and was reinvesting money to build infrastructure and real assets. Most startups aren’t. All Bezos had to do to turn a profit at any time is stop building warehouses. 2. Amazon completely pivoted and almost all of its profit comes from AWS. And no Amazon did not use excess capacity to start AWS. It was built from the ground up as a separate service [1]. Every company likes to point to Amazon and say we can do it too. That’s just like a company claiming if they bring their former CEO back after 10 years they can become a three trillion dollar company. And standard disclaimer since you brought up Amazon, I work at AWS. [1] https://readwrite.com/popping-the-amazon-web-services-capacity-myth/ https://readwrite.com/popping-the-amazon-web-services-capaci...

derefr 4y ago

If you have solid growth, unit economics, and cashflow, you don't need VCs; you can just get a business loan from a bank. Or do an IPO.

moralestapia 4y ago
Or still talk to VCs, but leverage is on your side now.
corybrown 4y ago
"just"
- derefr 4y ago
  No “just” about it; with those things in place, getting a business loan is far simpler than getting a VC to invest in you. To a (big) bank, your business is just an entity with a credit score. That credit score is based on those factors you listed. No weeks/months of glad-handing and human-factors evaluation like VCs do; hand a bank the data, they plug-and-chug, and you either get a loan or you don’t.
  - randomsearch 4y ago
    Banks are insanely risk averse. VC fundraising can be faster, simpler, and is possible when banks won’t go near you.
    - derefr 4y ago
      Yes, and? We're talking specifically about companies that have "solid growth, unit economics, and cashflow" — i.e. which have a stable business model + revenue engine. Businesses that have been de-risked. Businesses where the only reason they're not bigger already, is that they need money to throw into the coal furnace to power the train up the hockey-stick hill. At that stage of a business, you wouldn't be taking seed-stage or series-A funding; it'd be series-B or series-C — where the type of investors who do those investments are just as risk-averse as banks, and are looking at essentially the same things banks look at. At that stage of a business, you know there isn't anything on the horizon that'll kill your share price. Your market cap is stable (save for the growth you're trying to enable.) So you should be extremely wary to let go of any more equity. You should highly prefer debt-backed investment (i.e. loans) over equity-backed investment, because your equity value increase from the growth should be predictably paying off that debt, and then some, likely the same fiscal year you take on the loan. Selling any equity at that period in a company's growth is throwing earnings down the drain.

senttoschool 4y ago

Yes, this. Can't imagine how many very talented people I know have gone into helping crypto scams.

pavlov 4y ago
When evaluating engineering candidates, a résumé showing time spent in crypto in excess of six months is going to be a giant red flag and default no-hire for me.
- n42 4y ago
  This is short sighted and I will happily hire the talent you are missing out on
  - pavlov 4y ago
    I’ll be sure to give them your HN username.
    - bergenty 4y ago
      I’ll take them as well, thank you.
      - miracle2k 4y ago
        Send some my way too.
- ThalesX 4y ago
  I find myself working in the web3 space despite not being a fan of crypto (quite the contrary). What I have helped implement working in this space touches on distributed & decentralized systems, edge computing, cryptography and I could probably name a few more technically interesting areas. Actually made use of those trees, graphs and associated algorithms that you see popping up in coding interviews, after which you never hear about them again. While I respect your decision, if we are talking about technical exposure to interesting challenges, I think you're leaving a lot on the table by defaulting to no-hire.

junofan 4y ago

It’s tough to raise for niche B2B SaaS right now. As a category these are businesses that aren’t productive enough for Microsoft/Google/Amazon’s time to enter. So there’s a ceiling.

lvl102 4y ago

So what are we building with Rust now? I kid.