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Venture capital has been long gone from Twilio at this point. It's a public company and no matter what the history of how the company raised the capital to buil

by jmacd 3y ago

Venture capital has been long gone from Twilio at this point. It's a public company and no matter what the history of how the company raised the capital to build its business initially, it is simply acting as a public company now. Had they chosen to stay private and continue to use venture capital, they may not have had to reposition the way they have. See: Stripe. Plenty of privately owned businesses IPO and become subject to the same forces. Less than 50% of publicly listed companies are VC backed.

dheera 3y ago
I think they were saying that a investor-backed company only has a pathway to either (a) acquisition, likely by a public company, or (b) going public. Investors need (a) or (b) to get a payout, that's their business model, that's the reason they invest in your company. If you avoid the venture investor route, you can avoid both outcomes (a) and (b), keep the company privately owned, just stay awesome and customer-friendly forever, and avoid being forced to eventually prioritize shareholders over customers.
- TheRealDunkirk 3y ago
  All the perfectly-successful, privately-owned companies seem to have a price at which they eventually sell out to a soulless conglomerate, q.v. StackOverflow and GitHub.
  - jmacd 3y ago
    Yes, every business needs to be recapitalized at some point. There is an entire industry that focuses on finding the non-public companies that OP mentions. It's called Private Equity and they buy these companies when they have come to the end of their natural cash flowing life. The owners have either (at great pain) developed a sufficient capital base and succession plan to provide continuity (which would require significant ongoing investment in R&D out of cash flow in order to develop competitive products), or they must find a plan for the business. Going public solves this problem for them, so does selling privately. Neither option really eliminates the requirement to remain competitive.
    - TheRealDunkirk 3y ago
      Story after story involving a business getting bought by private ends with the PE 1) buying an ENORMOUS amount of debt based on the goodwill of the history of the company, 2) giving themselves ENORMOUS bonuses, and then 3) filing bankruptcy and liquidating. This is an entire AREA of business that should just not exist. It would seem that "investors" selling debt to these PE parasites would learn their lessons, but I expect that the even-bigger lesson is that they're all in on the grift together, and they're ALL making money somehow.
  - dheera 3y ago
    Yes, I mean it usually happens like this (a) Some dude is making $500K/year at Google or $250K/year elsewhere or whatever (b) They start a privately-owned company and hit $1M/year personal income and are pretty happy, at least happy enough to not want to go back to working for someone else (c) But then soulless conglomerate offers them $20M+ in one go for an acquisition I don't blame them for taking the $20M. It can be a life-changing amount of money.

by jmacd 3y ago

dheera 3y ago

I think they were saying that a investor-backed company only has a pathway to either (a) acquisition, likely by a public company, or (b) going public. Investors need (a) or (b) to get a payout, that's their business model, that's the reason they invest in your company. If you avoid the venture investor route, you can avoid both outcomes (a) and (b), keep the company privately owned, just stay awesome and customer-friendly forever, and avoid being forced to eventually prioritize shareholders over customers.

TheRealDunkirk 3y ago
All the perfectly-successful, privately-owned companies seem to have a price at which they eventually sell out to a soulless conglomerate, q.v. StackOverflow and GitHub.
- jmacd 3y ago
  Yes, every business needs to be recapitalized at some point. There is an entire industry that focuses on finding the non-public companies that OP mentions. It's called Private Equity and they buy these companies when they have come to the end of their natural cash flowing life. The owners have either (at great pain) developed a sufficient capital base and succession plan to provide continuity (which would require significant ongoing investment in R&D out of cash flow in order to develop competitive products), or they must find a plan for the business. Going public solves this problem for them, so does selling privately. Neither option really eliminates the requirement to remain competitive.
  - TheRealDunkirk 3y ago
    Story after story involving a business getting bought by private ends with the PE 1) buying an ENORMOUS amount of debt based on the goodwill of the history of the company, 2) giving themselves ENORMOUS bonuses, and then 3) filing bankruptcy and liquidating. This is an entire AREA of business that should just not exist. It would seem that "investors" selling debt to these PE parasites would learn their lessons, but I expect that the even-bigger lesson is that they're all in on the grift together, and they're ALL making money somehow.
- dheera 3y ago
  Yes, I mean it usually happens like this (a) Some dude is making $500K/year at Google or $250K/year elsewhere or whatever (b) They start a privately-owned company and hit $1M/year personal income and are pretty happy, at least happy enough to not want to go back to working for someone else (c) But then soulless conglomerate offers them $20M+ in one go for an acquisition I don't blame them for taking the $20M. It can be a life-changing amount of money.