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I agree with some of your sentiments, but you'd make a stronger point if you didn't play math games. You are citing Dow Jones Venturesource exits. First off,

I agree with some of your sentiments, but you'd make a stronger point if you didn't play math games. You are citing Dow Jones Venturesource exits. First off, they are tracking venture-backed companies. So your denominator in that particular fraction isn't people shooting for M&A someday-- it's a tiny slice of companies that get VC dollars. How many TOTAL VC backed companies exist? 5k? 50k? I honestly have no idea, but comparing it to people getting struck by lightning is just silly. Second, you mention an 8 million dollar sale as your example. $71M was the median in those 522 exits (http://www.dowjones.com/pressroom/releases/2011/01032012-VCExits-0172.asp http://www.dowjones.com/pressroom/releases/2011/01032012-VCE...). All that aside, I think this whole argument just shouldn't be happening. I think we're all in agreement that the funded path is higher risk and higher reward.

ahoyhere 15y ago
Speaking of numbers games, you use "median" when we all know that median exit is valueless without information about distribution. Mode is much more valuable. But that data is not available. However, if you pay attention to the publicized acquisitions which happen fairly often, the amounts are most often under $10m. As for whether my number comparisons make good dialectic sense or not, it doesn't matter. This isn't dialectic, it's rhetoric. It's a tool for thinking about something. There's no point in pretending we're even attempting to approach Absolute Truth here. As a tool for thinking about something, a contrast of M&As vs lightning strike injuries is quite valuable. Because we all "know" people who have been bought, but very few of us know people who have been injured by lightning. This shows us that we're in a bubble, a slice of unreality, where the availability heuristic skews our deeply felt understanding of likelihood. Finally, yes. Dow Jones Venturesource tracks only venture-backed companies. Everyone on HN seems to agree that achieving venture funding is not only important for growth, but important for the connections the VC has to people who would buy the startup. Presumably that belief has some grounding in fact. This leads us to the conclusion that an acquisition is more likely when there is VC involved than not.

ahoyhere 15y ago

Speaking of numbers games, you use "median" when we all know that median exit is valueless without information about distribution. Mode is much more valuable. But that data is not available. However, if you pay attention to the publicized acquisitions which happen fairly often, the amounts are most often under $10m. As for whether my number comparisons make good dialectic sense or not, it doesn't matter. This isn't dialectic, it's rhetoric. It's a tool for thinking about something. There's no point in pretending we're even attempting to approach Absolute Truth here. As a tool for thinking about something, a contrast of M&As vs lightning strike injuries is quite valuable. Because we all "know" people who have been bought, but very few of us know people who have been injured by lightning. This shows us that we're in a bubble, a slice of unreality, where the availability heuristic skews our deeply felt understanding of likelihood. Finally, yes. Dow Jones Venturesource tracks only venture-backed companies. Everyone on HN seems to agree that achieving venture funding is not only important for growth, but important for the connections the VC has to people who would buy the startup. Presumably that belief has some grounding in fact. This leads us to the conclusion that an acquisition is more likely when there is VC involved than not.