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According to Clement (the HF CEO) they are close to covering their costs, and have 10years runway: https://twitter.com/ClementDelangue/status/169476535796828615

by Palmik 3y ago

According to Clement (the HF CEO) they are close to covering their costs, and have 10years runway: https://twitter.com/ClementDelangue/status/1694765357968286159 https://twitter.com/ClementDelangue/status/16947653579682861...

version_five 3y ago
Can someone who knows the VC industry explain why having 10 years runway would be considered good? Aren't these companies supposed to be deploying capital as quickly as possible, not banking it. If a ceo said they needed your money 5+ years from now, wouldn't you wait until then to commit?
- echelon 3y ago
  > If a ceo said they needed your money 5+ years from now, wouldn't you wait until then to commit? Why would a CEO give up equity if they don't need the capital? Wouldn't they prefer not to sell big chunks of flesh? If he's not deploying it now, maybe the CEO is predicting rough times ahead and wants to de-risk for future cash flow or fundraising turbulence? Isn't that, too, a kind of negative signal? Or is this all prudent?
  - hustwindmaple1 3y ago
    There are times when capital is cheap and abundant and there are times capital is scarce and hard to come by
- jasonwatkinspdx 3y ago
  FOMO is a thing among VCs. You may not be let in the round 5 years from now, or the price may be less favorable, etc.
- stevofolife 3y ago
  Someone who knows the VC industry should chime in on this - but AFAIK, companies don't get all their money from investor at once.
  - fulladder 3y ago
    No, you typically get all the money wired into your bank account immediately after the deal closes. It's possible to structure a deal where the company has to reach a series of milestones to unlock each additional tranche of funding, but this is less common.
- ZephyrBlu 3y ago
  Currently 10 years of runway. I wouldn't expect them to maintain that for a significant period of time.
mlguy123 3y ago
Notice the choice of words: "Most of our OSS and free usage cost". Who knows what's omitted from that. Also assuming they have zero money left in the bank from the prev round (they def didn't) they're losing/burning $2mm a month

by Palmik 3y ago

version_five 3y ago

Can someone who knows the VC industry explain why having 10 years runway would be considered good? Aren't these companies supposed to be deploying capital as quickly as possible, not banking it. If a ceo said they needed your money 5+ years from now, wouldn't you wait until then to commit?

echelon 3y ago
> If a ceo said they needed your money 5+ years from now, wouldn't you wait until then to commit? Why would a CEO give up equity if they don't need the capital? Wouldn't they prefer not to sell big chunks of flesh? If he's not deploying it now, maybe the CEO is predicting rough times ahead and wants to de-risk for future cash flow or fundraising turbulence? Isn't that, too, a kind of negative signal? Or is this all prudent?
- hustwindmaple1 3y ago
  There are times when capital is cheap and abundant and there are times capital is scarce and hard to come by
jasonwatkinspdx 3y ago
FOMO is a thing among VCs. You may not be let in the round 5 years from now, or the price may be less favorable, etc.
stevofolife 3y ago
Someone who knows the VC industry should chime in on this - but AFAIK, companies don't get all their money from investor at once.
- fulladder 3y ago
  No, you typically get all the money wired into your bank account immediately after the deal closes. It's possible to structure a deal where the company has to reach a series of milestones to unlock each additional tranche of funding, but this is less common.
ZephyrBlu 3y ago
Currently 10 years of runway. I wouldn't expect them to maintain that for a significant period of time.

mlguy123 3y ago

Notice the choice of words: "Most of our OSS and free usage cost". Who knows what's omitted from that. Also assuming they have zero money left in the bank from the prev round (they def didn't) they're losing/burning $2mm a month