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Bootstrapped GitHub Now Raising a Round from Andreessen Horowitz
- latchkey 14y agoAs the founder of a self-funded startup, I need to be careful with how I spend my savings. So far, my costs are $20/month for cloudflare (ssl), $2/week on AppEngine (still working off that free $50 credit I got for being an early adopter) and $7/month happily paid for Github hosting. More power to them, I've been around open source for a long time now and this is the first company that has revolutionized software development for me.
- jonursenbach 14y agoGiven that they haven't ever taken any VC money, I wonder if they're doing this so the founders can cash out.
- joshu 14y agoThey had ~ 70 employees. This implies real revenues. What makes you think the founders couldn't cash out?
- jonursenbach 14y agoWhy else would they be raising money at this point after being so staunchly against it in the past?
- k-mcgrady 14y agoThey have plans to grow, which they need money for. If it was obvious they were just trying to cash out no VC would invest.
- jmathai 14y agoAgreed. I'm thinking they're looking to expand Github's services outside of "code".
- drumdance 14y agoYou can do a little of both. I've seen companies do rounds that put cash in the founders pocket but still want to grow.
- joshu 14y agoGenerally, to grow more quickly. Where have they said they were against it? I think they are often held up as an exemplar of bootstrapping by other folks, but I don't recall too much from them directly either way.
- deleted 14y ago[deleted]
- petercooper 14y agoAcquisitions? There are quite a few developer tools (and the developers of such) that would be useful to the company. For example, things like https://sifterapp.com/ https://sifterapp.com/ or even developers of apps like TextMate, Sublime Text 2, companies like http://www.panic.com/ http://www.panic.com/, time tracking apps, etc - anything that the average GitHub developer would be likely to use, even. My list might be a bit frivolous, but money would give options, at least. (Edit: Actually, why not Heroku style cloud hosting too? The code's already on the service ready to roll..)
- iamleppert 14y agoThat's exactly what is wrong with companies. You don't need to acquire every whiz-bang app there is. Focus on your core competencies and on improving your product. Acquiring stuff for show and because it's "in your market" seems strategic on the surface but often times (unless for the talent) is the first mistake.
- luigi 14y agoAndreessen Horowitz is a GitHubber!
- snprbob86 14y agoBlah. I hate those blog posts. I try to keep my RSS feeds extremely light, but I really want GitHub feature announcements. I wish their product "broadcasts" had a feed separate from the company log.
- Aethaeryn 14y agoFor just the features, subscribe to broadcasts[1] rather than the entire blog.[2] I couldn't find a mention of this on the website itself; instead, I just guessed the URL and it seems to work. [1] https://github.com/blog/broadcasts.atom https://github.com/blog/broadcasts.atom [2] https://github.com/blog.atom https://github.com/blog.atom
- wavephorm 14y agoThis is pretty light on details and it kind of makes no sense. Everyone loves the product and it's a (apparently very) profitable business. What can Andreesen Horowitz do to help them other than come in and do another bubbly ol' flipparoo?
- noahc 14y agoIt allows founders to take money off the table without selling out to a company who would have interests other than growing github.
- jmathai 14y agoHow does that make sense for the VC though? They're not in the business of cashing founders out.
- snprbob86 14y agoPresumably the founders are committed to growing the product line and potentially creating a new publicly traded developer tools company.
- deleted 14y ago[deleted]
- noahc 14y agoOne senerio would be give the founders enough that if they swing for the fences and strike out they still have enough. This aligns incentives and removes risk from founders. In addition, if founders want to take cash off the table and that is what it takes to make a great investment in github you do it.
- deleted 14y ago[deleted]
- amorphid 14y agoVCs are in the business of making money for their fund. Any deal that helps work towards that goal is legit. What a company receiving the money does with the money invested is secondary to getting a return on investment. For example, Elevation partners vought Facebook shares via secondary markets because they expected the shares to be worth significantly more than the initial purchase price .* The investment never went into Facebook's bank account. * Source -- http://m.techcrunch.com/2010/04/05/source-elevation-partners-got-about-1-of-facebook-for-90-million http://m.techcrunch.com/2010/04/05/source-elevation-partners....
- ricardobeat 14y agoAn "impressive" 600 or 800 million? This makes the Instagram deal look even more out of proportion. Github ought to be worth a lot more, it's a profitable huge business with real assets, used by millions everyday for work. But the question is: what could they do with more money that they can't do now?
- diego 14y agoI heard that large companies expect a higher level of "enterprise" support from Github. That's where the real money is, and a small company just cannot scale easily in this respect. Proper enterprise support requires customer representatives, phone lines, sales people. All that is expensive and requires capital. Of course, this is just a wild guess. I have no firsthand information.
- philwelch 14y agoSupport and sales, if they're interested in growing (and why wouldn't they be?)
- onetwothreefour 14y agoGithub's support for Enterprise is atrocious at best. But we still pay for it, because what else is there? :)
- sureshv 14y agogit ;-)
- daniel_levine 14y agohttp://www.atlassian.com/software/stash/overview http://www.atlassian.com/software/stash/overview
- fpgeek 14y agoHaving used both github and some Atlassian products (though, to be fair, not Stash), my instinctive reaction is: No. No. No, No, No. No, No. No. That might be wrong, but I'd need to see a lot of evidence first.
- SeoxyS 14y agoTwo questions: - How is GitHub worth less than Pintrest? - What could GitHub possibly gain from raising money? It's clearly not about money. Is this a liquidity event? Couldn't they just issue a dividend for that, they've clearly got plenty of cash… Or is this about the credibility of having a valuation. In that case, couldn't they have gone public? Amazon went public at a sub-$500M valuation, and look at them now! Edit: come to think of it, I can see the possibility of wanting to acquire other companies, and not currently having the capital to do so. That's about it.
- dave1619 14y agoMy guess is that Github wants to expand more aggressively (probably into enterprise) and extra cash will speed that up.
- benackles 14y agoWhat does "[going] into enterprise" mean? Almost every fortune 500 company is using GitHub in some capacity. Isn't "[going] into enterprise" simply marketing jargon when you're talking about SaaS products like GitHub.
- nowarninglabel 14y agoWell, there is a vast difference between "every fortune 500 company is using Github in some capacity" and "every fortune 500 company is paying for the Enterprise version of Github." I think it'd be an easy sell on a lot of companies, since, as you say, many of the developers are already using it. Heck, I even want to convince my company to get the Enterprise version of GitHub, but we're a non-profit and too small for it.
- benackles 14y agoThat still doesn't answer why you need to raise VC money. How does VC money add value to a company which already has an "enterprise" solution and is a known brand to almost all Fortune 500 companies? GitHub is already making a lot of money via cash flow and VC money will only make them beholden to outside interests. Stack Overflow tried to spin why they were raising money after spending years railing against VC-backed ventures. This seems to be a similar scenario. [1] https://enterprise.github.com https://enterprise.github.com
- goronbjorn 14y agoIf I were to guess, this is probably to help them move off of Rackspace onto their own hosting solution in order to appeal to that enterprise customer segment that keeps getting mentioned.
- Oompa 14y agoBut GitHub's enterprise application is something enterprises can host themselves, inside their firewall. https://enterprise.github.com/ https://enterprise.github.com/
- goronbjorn 14y agoI'm referring to the use-case where it's something that's truly cloud-based–think more like Salesforce. Most enterprises are (slowly) shifting to this.
- endlessvoid94 14y agoWhy is defunkt the only listed founder of github on pandodaily?
- dwynings 14y agoBecause he's the only one with an AngelList profile.
- lancepantz 14y agoWho cares? Pando Daily is a startup, funded by venture capitalists, that covers startups and venture capitalists. I love how at the end they mention that they are funded by Andreessen Horowitz, feigning journalistic integrity. This is just the silicon valley machine at work.
- endlessvoid94 14y ago> Who cares? It's not correct.
- markerdmann 14y agoI'm surprised by this. Tom Preston-Werner's talk at Startup School 2010, which had a strong influence on me and many of my friends (we still refer to it often), was very anti-VC. Here is a link to the talk, and a relevant quote from the introduction: http://www.justin.tv/startupschool/b/272031754 http://www.justin.tv/startupschool/b/272031754 "But for me, I don't have to worry about these things, because GitHub has never taken any funding, ever. So I want to talk a little bit about how you can avoid this mess of VC, if you so choose, by telling you a little bit of my story."
- danielharan 14y ago1- Andreesen Horowitz isn't just any VC 2- They already avoided most of the problems of VCs by getting to profit.
- markerdmann 14y agoYou're right. In his blog post about the talk[1], he makes it clear that his emphasis is on bootstrapping to profitability. "The ironic thing about bootstrapping and venture capital is that once you demonstrate some success, investors will come to YOU. When this happens you will be in a much better place to make a more reasoned choice about taking on additional capital and all the complexities that come with it. Talking to VCs with some leverage in your back pocket is an entirely different game from throwing yourself in front of a conference table full of general partners and trying to persuade them that you're worth their time and money. Power is happiness." [1]: http://tom.preston-werner.com/2010/10/18/optimize-for-happiness.html http://tom.preston-werner.com/2010/10/18/optimize-for-happin...
- Nate75Sanders 14y agoIf they're really looking to use the money to expand into Enterprise territory, I think it's a really different game. I think the bootstrapped B2C game is ALL about saving money/not going broke. It's most accurately about making great decisions (it always is, at any level), but I think for what they were doing, that meant not spending. Their management/founders might have been great at that. I think it's very much an engineer's mentality, anyway. However, B2B is a different animal, I think, and one that Tom Preston-Werner might not be geared to hunt -- at least not until someone turned him on to how much bigger GitHub could be. It's not cheap to get the attention of big companies, neither in pursuing them at all, nor in buying the people you need to pursue them -- engineers usually can't do this by themselves. You need veterans of _that_ game and it's a different game (at least from what I've seen).
- DigitalSea 14y agoI'm surprised that Github is taking on capital, they must have some pretty hefty goals in mind because my understanding is that they're quite profitable. It's like taking out a home loan after building your own home with your own cash and labour. What would the repercussions be from taking cash from Andreessen Horowitz? Will the original Githubber's keep their control over the company? I'm honestly a little worried, but at the same time if they want the cash to expand and make Github better, then I am all for it.
- almightygod 14y agoNo doubt Atlassian sees GitHub quickly approaching in their rear view mirror
- ConstantineXVI 14y agoThey did a while ago; hence buying BitBucket and coming out with Stash.
- gojomo 14y agoThis makes sense in a "as go the alpha geeks, so goes the rest of the world... eventually" sort of way. Git and github-style content-management requires a mental model very different from the mass/mass-enterprise market... but the tech-leaders way of thinking will reach there over time via repeated exposure, and Github is doing a great job of providing the benefits in approachable steps, and a whole package of related modern hosting/distribution/authoring assistance. Why wouldn't presentations, spreadsheets, and all other forms of writing eventually be amenable to dvcs-style revision control?
- culo 14y agoI still remember the founder Tom speaking at the Startup School (2010) and advising around 1000 people on why NOT raise funds. As I still remember the old About page of Github: "VC FUNDING = 0". LOL Enjoy: http://www.youtube.com/watch?v=T4VtBcmbbSs http://www.youtube.com/watch?v=T4VtBcmbbSs
- adrianwaj 14y agoDid they consider a loan?
- obtu 14y agoI'd like to think so, but I imagine that as a fast-growing company in a tech niche they are unusual enough that a bank wouldn't be qualified to evaluate their credit-worthiness.
- ya3r 14y agoI don't believe this. Github and Particularly TPW, and their successful bootstrap was the main inspiration for me to startup. As many has said it, Github > Instagram + Pinterest. I would say at least 5B$.
- hemancuso 14y agoI think it's easy to over-estimate the success and ubiquity of GitHub if you spend all day on HN. The real money-make for SCM is still Perforce, according to schacon at a somewhat recent drink-up in Boston. These questions about GitHub vs. Pinterest are revealing in that I think many folk on HN don't realize what a relatively small community of developers this is. Relative to the tens of millions of folk on Pinerest. Heck, GitHub's front page reveals they have only 1.6 million users. I wonder if their growth curve has started to flatten out. I hope they have a great plan/vision for what to do with the money, because running GitHub ad infinitum as an immensely successful small software company would seem to be a dream to me.
- to3m 14y agoWell, I'm not surprised Perforce wins the money-making contest... it IS quite expensive, particularly compared to git. Nevertheless, I'm inclined to agree about the apparent popularity of git vs its actual popularity. I don't think I've ever met anybody who's used git professionally, and in fact I don't even know that many people who've actually used git at all. Everybody I meet (though I haven't met absolutely everybody!) uses perforce if they can afford it, and SVN if they can't. SVN supports binary files tolerably well, and perforce supports them fine. perforce keeps working fine even when your depot's head revision (if that's the right term) gets to 300GB. Well... SVN probably doesn't do that. But it's still cheap.
- cracell 14y agoAs a Ruby/JavaScript developer I find it very bizarre that you don't know anyone that has used git professionally. Pretty much everyone I know uses it professionally and I'm a bit taken aback when someone hasn't even tried it.
- hemancuso 14y agoThis is my point, exactly. Just because practically everyone on HN is a Ruby/JS/Python dev doesn't mean the world at large reflects that breakdown. I am a bit taken aback that you can't imagine a C# or Java dev who has never had to touch git.
- tosh 14y agoIf you browse through github's blog you can easily see what happened the last few months: * github managed to hire & acquihire top talent like crazy * their UI/UX people really focused on making github's UI more consistent and usable * they spent time to go native * the enterprise solution got a lot of love so they have huge momentum and spend their time very well. personally I think they should look into making jobs.github.com THE resource to hire great talent. In a way github already is very relevant in the hiring process but similar to carreers.stackoverflow there is huge untapped opportunity to disrupt the hiring market. Anyway I think github has a bright future ahead and I'm very curious about what will happen in the coming months.