4 ms·

Out of acqui-hire stage

73 points by duck 15y ago

deleted 15y ago
[deleted]
illumen 15y ago
ramen noodle, aqui-hire, ..., facebook
- its_so_on 15y ago
  Personally, I would hate to be in Zuckerberg's shoes. I don't mean I would mind the money, but I would hate to literally be in his shoes running the company "with my name on it" as a sole founder. If anything goes wrong, he's pretty much "done" with entrepreneurship. So perhaps a better example is the loads of non-facebooks that make a ton of money on a quiet multibillion dollar exit, without anyone outside a tight circle even knowing who the founders were. (although having a ton of users). Instagram, maybe? EDIT: you guys don't like this comment. Let me generalize. - Facebook is a bad example because it reached a 50B valuation in private equity deals pre-IPO. It's better if you mention a company that has already IPO'd, been sold outright (founder not involved anymore), or has lower-valuation equity deals, so that the founder is not under as much pressure. I would not like to be in the position of figureheading such a company pre-IPO. This is just my personal taste. Please don't think that I'm trying to be prescriptive. You can trade places with Mr. Zuckerberg if you like. I'm just giving you my thoughts of a better example. now I'm at -2. Would you please explain why ramen noodle, aqui-hire, ..., facebook can't be replaced with ramen noodle, aqui-hire, ..., zynga (i.e. post ipo, valuation 6B) or ramen noodle, aqui-hire, ..., instagram (bought for 1b). Why do we have to use the company loads of people are saying will fail, and which has to start from a baseline of private equity deals that have already happened valuing it at 50 billion? This is approximately the amount of money Microsoft has in the bank. How many sales does Microsoft make per year. This is an enormous responsibility to his previous backers and those who believe in Facebook. I hope for him that everything goes right and he makes a great IPO and remains at the head of company that will always be worth more than that. But why pick an example where he's under pressure to achieve that. Can you imagine how devastating it would be for the day to come when facebook is sold for 5billion? That would mean that 90% of its valuation would have been "squandered". baselines and anchors are incredibly important. I think you guys are just not failing to appreciate the pressure on him to stay on top.
  - tdr 15y ago
    Come on! Yeah, he'd loose the "shine" but how many people have his experience and ability to deliver? (not to mention skillset). What happened to failure is part of learning?
    - its_so_on 15y ago
      Failing after creating a massively inflated bubble of a company (which is what in hindsight this would be IFF it fails) is not the kind of learning ANYONE needs. That's why the pressure is so great on him. EDIT: you guys don't like this comment. Let me generalize. - Facebook is a bad example because it reached a 50B valuation in private equity deals. It's better if you mention a company that has already IPO'd, been sold outright (founder not involved anymore), or has lower-valuation equity deals, so that the founder is not under as much pressure. I would not like to be in the position of figureheading such a company pre-IPO. This is just my personal taste. Please don't think that I'm trying to be prescriptive. You can trade places with Mr. Zuckerberg if you like. I'm just giving you my thoughts of a better example. I give up, you guys clearly don't like my impressions of the pressure on him. I guess we'll just have to agree to disagree.
      - tdr 15y ago
        I don't think he's doing that. At least not planning to.
        its_so_on 15y ago
        What I'm getting at (as mentioned in my other post) is that he already made private equity deals at a valuation of 50B. That kind of "learning experience" (not saying it WILL become one! That's why there is all this pressure) is not anything anyone needs. This isn't some future thing. Either the company is a 50B+ company indefinitely, or I don't want to be in his shoes. That is not the kind of hedging I like in my life. I'd much prefer to be at a place where either I will make a graceful exit at 800 million and the company continues to deliver, or it never becomes worth than the 50 million, the last valuation it raised money at. (hypothetical example). If this hypothetical latter example fails, fine, nice learning experience. If you fail after convincing someone to buy some of your company at a valuation of 50B, you're done. Facebook can never be worth less than it's been valued at, and there are plenty of similar properties that in retrospect were "bubbles". (myspace etc). This is why I wouldn't like to be in his shoes.
tdenkinger 15y ago
Forgot one: "Go for profitability, make poor decisions, bounce along the bottom for awhile, and then liquidate." The most likely path.
davidw 15y ago
A few 'case studies' and some data would make this a lot more interesting discussion.
- its_so_on 15y ago
  I would frame this as, Let's hear them! HN is the right place to ask...
  - kposehn 15y ago
    Some friends of mine went through the same process and got to actual value. They chose the cash machine and did fairly well - to this date they turn a fairly significant amount of cash and do very well. The regret they still have to this day is it didn't fit with their life goals. They each wanted to keep doing more things, but they are tied in and cannot exit that easily. Several of the founders would like to move on, but that option is several years off. I think the lesson I've learned is that as entrepreneurs we should look at those options based on our goals in life. If you'll be satisfied doing the same sort of business for a long time, then the cash machine is open. If you're not, look for - and work towards - that exit. One of them said to me "The path to your exit starts at day one; people you meet today could be your potential acquirers/partners tomorrow." [edited to show the last line was a quote]
ChuckMcM 15y ago
Nice post. I tell engineers itching for promotion a similar story. Once you are demonstrating you can be promoted you have to ask do you want to be. The standards of evaluating your work change between code monkey and senior code monkey. As it is with startups, as you grow the expectations of what you can do also go up. So doing just as well as before when you heard feedback like "cool, innovative" becomes "is that all they do?" as Scott Mcnealy told promoted folks at Sun, "one step up, one step closer to the door."
cperciva 15y ago
Isn't this largely determined by the number of employees? My impression was that for internet startups the valuation to # of employees ratio tended to be close to constant (since when valuations rise companies raise more money, of which almost all gets spent on employees); which suggests that the valuation to # of founders ratio is proportional to the total # of employees to # of founders ratio.
- deleted 15y ago
  [deleted]

73 points by duck 15y ago

deleted 15y ago

[deleted]

illumen 15y ago

ramen noodle, aqui-hire, ..., facebook

its_so_on 15y ago
Personally, I would hate to be in Zuckerberg's shoes. I don't mean I would mind the money, but I would hate to literally be in his shoes running the company "with my name on it" as a sole founder. If anything goes wrong, he's pretty much "done" with entrepreneurship. So perhaps a better example is the loads of non-facebooks that make a ton of money on a quiet multibillion dollar exit, without anyone outside a tight circle even knowing who the founders were. (although having a ton of users). Instagram, maybe? EDIT: you guys don't like this comment. Let me generalize. - Facebook is a bad example because it reached a 50B valuation in private equity deals pre-IPO. It's better if you mention a company that has already IPO'd, been sold outright (founder not involved anymore), or has lower-valuation equity deals, so that the founder is not under as much pressure. I would not like to be in the position of figureheading such a company pre-IPO. This is just my personal taste. Please don't think that I'm trying to be prescriptive. You can trade places with Mr. Zuckerberg if you like. I'm just giving you my thoughts of a better example. now I'm at -2. Would you please explain why ramen noodle, aqui-hire, ..., facebook can't be replaced with ramen noodle, aqui-hire, ..., zynga (i.e. post ipo, valuation 6B) or ramen noodle, aqui-hire, ..., instagram (bought for 1b). Why do we have to use the company loads of people are saying will fail, and which has to start from a baseline of private equity deals that have already happened valuing it at 50 billion? This is approximately the amount of money Microsoft has in the bank. How many sales does Microsoft make per year. This is an enormous responsibility to his previous backers and those who believe in Facebook. I hope for him that everything goes right and he makes a great IPO and remains at the head of company that will always be worth more than that. But why pick an example where he's under pressure to achieve that. Can you imagine how devastating it would be for the day to come when facebook is sold for 5billion? That would mean that 90% of its valuation would have been "squandered". baselines and anchors are incredibly important. I think you guys are just not failing to appreciate the pressure on him to stay on top.
- tdr 15y ago
  Come on! Yeah, he'd loose the "shine" but how many people have his experience and ability to deliver? (not to mention skillset). What happened to failure is part of learning?
  - its_so_on 15y ago
    Failing after creating a massively inflated bubble of a company (which is what in hindsight this would be IFF it fails) is not the kind of learning ANYONE needs. That's why the pressure is so great on him. EDIT: you guys don't like this comment. Let me generalize. - Facebook is a bad example because it reached a 50B valuation in private equity deals. It's better if you mention a company that has already IPO'd, been sold outright (founder not involved anymore), or has lower-valuation equity deals, so that the founder is not under as much pressure. I would not like to be in the position of figureheading such a company pre-IPO. This is just my personal taste. Please don't think that I'm trying to be prescriptive. You can trade places with Mr. Zuckerberg if you like. I'm just giving you my thoughts of a better example. I give up, you guys clearly don't like my impressions of the pressure on him. I guess we'll just have to agree to disagree.
    - tdr 15y ago
      I don't think he's doing that. At least not planning to.
      - its_so_on 15y ago
        What I'm getting at (as mentioned in my other post) is that he already made private equity deals at a valuation of 50B. That kind of "learning experience" (not saying it WILL become one! That's why there is all this pressure) is not anything anyone needs. This isn't some future thing. Either the company is a 50B+ company indefinitely, or I don't want to be in his shoes. That is not the kind of hedging I like in my life. I'd much prefer to be at a place where either I will make a graceful exit at 800 million and the company continues to deliver, or it never becomes worth than the 50 million, the last valuation it raised money at. (hypothetical example). If this hypothetical latter example fails, fine, nice learning experience. If you fail after convincing someone to buy some of your company at a valuation of 50B, you're done. Facebook can never be worth less than it's been valued at, and there are plenty of similar properties that in retrospect were "bubbles". (myspace etc). This is why I wouldn't like to be in his shoes.

tdenkinger 15y ago

Forgot one: "Go for profitability, make poor decisions, bounce along the bottom for awhile, and then liquidate." The most likely path.

davidw 15y ago

A few 'case studies' and some data would make this a lot more interesting discussion.

its_so_on 15y ago
I would frame this as, Let's hear them! HN is the right place to ask...
- kposehn 15y ago
  Some friends of mine went through the same process and got to actual value. They chose the cash machine and did fairly well - to this date they turn a fairly significant amount of cash and do very well. The regret they still have to this day is it didn't fit with their life goals. They each wanted to keep doing more things, but they are tied in and cannot exit that easily. Several of the founders would like to move on, but that option is several years off. I think the lesson I've learned is that as entrepreneurs we should look at those options based on our goals in life. If you'll be satisfied doing the same sort of business for a long time, then the cash machine is open. If you're not, look for - and work towards - that exit. One of them said to me "The path to your exit starts at day one; people you meet today could be your potential acquirers/partners tomorrow." [edited to show the last line was a quote]

ChuckMcM 15y ago

Nice post. I tell engineers itching for promotion a similar story. Once you are demonstrating you can be promoted you have to ask do you want to be. The standards of evaluating your work change between code monkey and senior code monkey. As it is with startups, as you grow the expectations of what you can do also go up. So doing just as well as before when you heard feedback like "cool, innovative" becomes "is that all they do?" as Scott Mcnealy told promoted folks at Sun, "one step up, one step closer to the door."

cperciva 15y ago

Isn't this largely determined by the number of employees? My impression was that for internet startups the valuation to # of employees ratio tended to be close to constant (since when valuations rise companies raise more money, of which almost all gets spent on employees); which suggests that the valuation to # of founders ratio is proportional to the total # of employees to # of founders ratio.

deleted 15y ago
[deleted]