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Seems logical, also doesn't reflect reality in my experience. Founders want to piss off an incumbent enough to be bought or IPO. Founders also seek social rewar

Seems logical, also doesn't reflect reality in my experience. Founders want to piss off an incumbent enough to be bought or IPO. Founders also seek social reward. Once you're in the one percent, your motivations are completely detached from the rest of us. You're encouraged to consider yourself as a wunderkind playing high stakes poker in order to raise money, as this is the only real signal investors latch onto. Disruption itself is a game of usurper; not one of business fundamentals. The agents still act "rationally" (in their own best interests, supposedly), but those interests are defined differently than suggested.

monero-xmr 4y ago
Plenty of founders go public early and raise large capital. Biotech, energy firms, and electric car companies recently. Tech startups are pretty unique in that they need huge amounts of capital from private markets for a long time. It requires a higher risk-reward story to be told leading to moonshots.
- ShamelessC 4y ago
  Sorry I didn't qualify that we're talking about tech founders on the technology forum.
- fallingknife 4y ago
  Tech companies actually need much less capital to scale than other industries. Which is why VC focuses on software, and why tech founders are so much richer than founders in other industries. The problem is that once the VC industry reached its peak, the capital itself became a competitive weapon. If startup 1 only really needs $10 million in capital to reach profitability, the VCs can't make that much money off of it. So they will fund startup 2 with $100 million over several rounds, and almost certainly knock startup 1 out of the market just by scaling faster. That means startup 1 essentially has to raise and burn massive amounts to grow as rapidly as possible, even if they would prefer to go with the $10 million to profitability plan that would be considered the only sane route in any other industry. And it leads to the almost unbelievable to anyone in finance outside of VC situation of investors being pissed that a company isn't burning cash fast enough.

monero-xmr 4y ago

Plenty of founders go public early and raise large capital. Biotech, energy firms, and electric car companies recently. Tech startups are pretty unique in that they need huge amounts of capital from private markets for a long time. It requires a higher risk-reward story to be told leading to moonshots.

ShamelessC 4y ago
Sorry I didn't qualify that we're talking about tech founders on the technology forum.
fallingknife 4y ago
Tech companies actually need much less capital to scale than other industries. Which is why VC focuses on software, and why tech founders are so much richer than founders in other industries. The problem is that once the VC industry reached its peak, the capital itself became a competitive weapon. If startup 1 only really needs $10 million in capital to reach profitability, the VCs can't make that much money off of it. So they will fund startup 2 with $100 million over several rounds, and almost certainly knock startup 1 out of the market just by scaling faster. That means startup 1 essentially has to raise and burn massive amounts to grow as rapidly as possible, even if they would prefer to go with the $10 million to profitability plan that would be considered the only sane route in any other industry. And it leads to the almost unbelievable to anyone in finance outside of VC situation of investors being pissed that a company isn't burning cash fast enough.