5 ms·

I believe Paul Graham once defined the difference as: a startup wants to (but doesn't necessarily) have "a significant exit," it either goes public, or gets acq

I believe Paul Graham once defined the difference as: a startup wants to (but doesn't necessarily) have "a significant exit," it either goes public, or gets acquired for a large amount. A new small business that aims to be sustainable, profitable, grow, etc, isn't a "startup," without the significant exit. Unfortunately I remember hearing this in a video or audio interview, so it's hard for me to search for this attribution.

pg 18y ago
I wouldn't say this is the defining quality of a startup, but it is an almost inevitable consequence of the defining quality, which is growth. A fast-growing technology company will get acquisition offers, whether they seek them or not. And one that grows sufficiently large will have to go public, whether they want to or not.
- Darmani 18y ago
  http://en.wikipedia.org/wiki/Koch_Industries http://en.wikipedia.org/wiki/Koch_Industries
  - pg 18y ago
    Only works if you don't give employees stock, which in turn only works in old industries like this.
    - davidcummings 18y ago
      SAS Institute is the world's largest private software company with over a billion in revenue and no stock options (http://harvardbusinessonline.hbsp.harvard.edu/b01/en/common/item_detail.jhtml;jsessionid=TIV4YYYRWEGOYAKRGWCB5VQBKE0YOISW?id=HR6 http://harvardbusinessonline.hbsp.harvard.edu/b01/en/common/...)
      - pg 18y ago
        It's too bad the use of "the exception proves the rule" in cases like this is a solecism, because this would be the perfect time for it. SAS is the closest thing to an old-style industrial company in the software business. (In "the exception proves the rule," proves is used in the older sense, meaning to test, not the newer sense, meaning to establish.)
- gaius 18y ago
  And one that grows sufficiently large will have to go public, whether they want to or not. I'm curious, what is your reasoning here? Because it will be acquired by a public company (e.g. Microsoft or Google)? Or just because investors will want a means to exit?
  - zack 18y ago
    Once you have enough shareholders (500+) the SEC requires you to go public. The SEC famously made a recent exception for Facebook, which is dealing with this problem because they haven given stock to many employees.
  - pg 18y ago
    There's an SEC rule that effectively forces you to go public once you have 500 shareholders. http://news.cnet.com/SEC-rule-may-nudge-Google-toward-IPO/2100-1030_3-5119504.html http://news.cnet.com/SEC-rule-may-nudge-Google-toward-IPO/21...
    - nickb 18y ago
      You can get an exemption for that though... http://www.businessweek.com/technology/content/nov2008/tc20081120_566312.htm http://www.businessweek.com/technology/content/nov2008/tc200...

pg 18y ago

I wouldn't say this is the defining quality of a startup, but it is an almost inevitable consequence of the defining quality, which is growth. A fast-growing technology company will get acquisition offers, whether they seek them or not. And one that grows sufficiently large will have to go public, whether they want to or not.

Darmani 18y ago
http://en.wikipedia.org/wiki/Koch_Industries http://en.wikipedia.org/wiki/Koch_Industries
- pg 18y ago
  Only works if you don't give employees stock, which in turn only works in old industries like this.
  - davidcummings 18y ago
    SAS Institute is the world's largest private software company with over a billion in revenue and no stock options (http://harvardbusinessonline.hbsp.harvard.edu/b01/en/common/item_detail.jhtml;jsessionid=TIV4YYYRWEGOYAKRGWCB5VQBKE0YOISW?id=HR6 http://harvardbusinessonline.hbsp.harvard.edu/b01/en/common/...)
    - pg 18y ago
      It's too bad the use of "the exception proves the rule" in cases like this is a solecism, because this would be the perfect time for it. SAS is the closest thing to an old-style industrial company in the software business. (In "the exception proves the rule," proves is used in the older sense, meaning to test, not the newer sense, meaning to establish.)
gaius 18y ago
And one that grows sufficiently large will have to go public, whether they want to or not. I'm curious, what is your reasoning here? Because it will be acquired by a public company (e.g. Microsoft or Google)? Or just because investors will want a means to exit?
- zack 18y ago
  Once you have enough shareholders (500+) the SEC requires you to go public. The SEC famously made a recent exception for Facebook, which is dealing with this problem because they haven given stock to many employees.
- pg 18y ago
  There's an SEC rule that effectively forces you to go public once you have 500 shareholders. http://news.cnet.com/SEC-rule-may-nudge-Google-toward-IPO/2100-1030_3-5119504.html http://news.cnet.com/SEC-rule-may-nudge-Google-toward-IPO/21...
  - nickb 18y ago
    You can get an exemption for that though... http://www.businessweek.com/technology/content/nov2008/tc20081120_566312.htm http://www.businessweek.com/technology/content/nov2008/tc200...