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Good point for sure. It was also relatively common for founders to take a bit off the table at Series B (or even Series A's) along the $100M path too. Both of

by corry 3y ago

Good point for sure. It was also relatively common for founders to take a bit off the table at Series B (or even Series A's) along the $100M path too. Both of which skew again towards preferring those outcomes to the bootstrapping one. #3 is definitely better in terms of your longer-term ability to make money as well. The personal brand from founding a $1B startup is very monetizable (if you must / want to) after acquisition/IPO, or at the very least to raise seed money for your next venture. Whether or not this calculus factors into founders' decisions to start a company I can't say. I doubt the mercenary motivation is as common as you suggest, just among the founders I know at least. I think the lure is more to get to build something yourself and 'not have a day job' / sense of adventure, and the potential for money is just kind of a nice cherry-on-top.

tgma 3y ago
> I doubt the mercenary motivation is as common as you suggest I did not mean to imply that most founders start companies to scam the investor base (who turns out to be sophisticated enough to deserve it even if so). It is just how the incentives in Silicon Valley lead you to operate. Basically SV model bribes you such that the #1 outcome would not even be rational, by design; i.e. you build a cash flow business, someone basically tells you that they are willing to give you best-case scenario upfront and ask you to come work for them and potentially make billions for them, so it is bascially a win-win for pretty much everyone except sometimes perhaps employees and customers. The natural outcome of the model means there will be a bunch of businesses with low probability of achieving their goal sustainably, by design. This does not require the founder to be/act evil. Nor do I think the existence of such model in the world is a bad thing overall, even if it leads to some scams/useless companies. It is very good net net, as the vast majority of the world is overly conservative in capital allocation (a la Warren Buffet) to balance it out.

by corry 3y ago

tgma 3y ago

> I doubt the mercenary motivation is as common as you suggest I did not mean to imply that most founders start companies to scam the investor base (who turns out to be sophisticated enough to deserve it even if so). It is just how the incentives in Silicon Valley lead you to operate. Basically SV model bribes you such that the #1 outcome would not even be rational, by design; i.e. you build a cash flow business, someone basically tells you that they are willing to give you best-case scenario upfront and ask you to come work for them and potentially make billions for them, so it is bascially a win-win for pretty much everyone except sometimes perhaps employees and customers. The natural outcome of the model means there will be a bunch of businesses with low probability of achieving their goal sustainably, by design. This does not require the founder to be/act evil. Nor do I think the existence of such model in the world is a bad thing overall, even if it leads to some scams/useless companies. It is very good net net, as the vast majority of the world is overly conservative in capital allocation (a la Warren Buffet) to balance it out.