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VCs don't want your dividends, they want you to deploy that capital into growing the company.
by il 15y ago
VCs don't want your dividends, they want you to deploy that capital into growing the company.
- donw 15y agoAt early stages, I can completely understand this. Consider Craigslist. Fantastically successful business, makes hundreds of millions of dollars a year using less people than you'd need to run a McDonalds. Growing this kind of company is not capital-intensive beyond a certain level. So, should you end up building a Craigslist, why would the VC firm want an exit, rather than a continuous (and large) flow of checks from dividends?
- il 15y agoCraigslist is a horrendously mismanaged business. I wouldn't be surprised to see AirBnB dwarf Craigslist soon- that's the kind of company VCs want to invest in, not something like Craigslist that has been stagnating for years.
- prodigal_erik 15y agoAirBnB started out by attacking Craigslist as well as the commons. They probably will win; I'm continually disappointed at how eagerly we reward bottom-feeders.
- DennisP 15y agoCraig isn't optimizing for profit. He's optimizing for maximum user benefit, and letting the users decide what benefits them the most. Mostly they want free classifieds without paid advertising attached, so that's what he gives them. In a few cases, the users wanted to pay for classifieds, and those users are the only reason Craigslist makes money. Judging Craigslist by the standards of a profit-seeking business is entirely missing the point.