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If any VCs who "invested" some of the $230 million into the dumbest product ever from obvious morons would like to instead invest with me, I'm pretty confident
by wilg 2y ago
If any VCs who "invested" some of the $230 million into the dumbest product ever from obvious morons would like to instead invest with me, I'm pretty confident I can do better than a 0.5x return!
- exogeny 2y agoIt's not a 0.5x. It's much lower -- $230 million was the amount raised, not the valuation. It's closer to 0.1-0.2x.
- necubi 2y agoThe parent is right, investors would almost certainly have 1x preference, which means they get back the first $230M in an acquisition. The valuation doesn't matter if you exit for less than money in. Founders and employees would get nothing out of this (aside from whatever HP is giving them directly as incentive to stick around).
- braza 2y agoThat's the most interesting thing because if those folks managed to get a parachute for their 1x pref investors with this abysmal final price, what does it mean for the several companies at the same situation? It's a pity that we do not have a version of "Who's holding the bag?"[1] for LP and VC funds, but with all challenges to raise money, it would be interesting to see how many funds are losing money at the moment. This is the inherent feature from VC funds but still, one thing is raise cheap money and having a "circular" money flowing (from A -> B - (...) -> IPO -> A) but if they do not arrive even in the IPO how this ecosystem will work if a US 5 Year Coupon pays 4.40%? [1] - https://pscmevents.com/wp-content/uploads/2023/03/Who-Is-Holding-The-Bag.pdf https://pscmevents.com/wp-content/uploads/2023/03/Who-Is-Hol...
- signatoremo 2y agoAre you sure? If given $230 millions what would you do and which AI product would you build, to generate $115 millions?
- sonofhans 2y agoYou’re kidding, right? In no way did Humane generate $115 million; they lost over $100 million. The list of ways not to do that is infinite. Start with: an AI which emits a binary yes/no to, “Should I invest some of this $230 million such that it becomes $115 million 5 years from now.”
- signatoremo 2y agoI mistakenly thought they generated a totally of $116 million in revenue. I meant to ask "If you were to get $230 million, how would you plan to generate as much money as Humane was able to generate during the length of its existence". Do you have an answer? > an AI which emits a binary yes/no to, “Should I invest some of this $230 million such that it becomes $115 million 5 years from now.” If you were pitching that to me, I'd ask: what is the AI's confidence in its answer, and how can you verify that?
- vel0city 2y ago> how would you plan to generate as much money as Humane was able to generate during the length of its existence". Do you have an answer? Humane generated negative $114M. They turned $230M into $116M. My prospectus is to buy a $1M house, throw $1M parties every day for a month, and burn the house down at the end and sell the charred remains for $1. I'll take a million dollar salary for these services. Then I'll shut it all down and return the leftovers to the investors. So total expenses for this endeavor: $1M + 31 * $1M + $1M in salaries so $33M. That's $81M better than Humane did, and I'll do it in less time!
- skuhn 2y agoI would immediately shut down and return $114 million to the investors. I'm keeping that extra $1 million as a tip for prompt service.
- signatoremo 2y agoIs that your pitch? Do you think anyone would give you the money?
- rsynnott 2y agoBear in mind that some of these VCs likely preferentially invest only in dumb AI things, so won't be interested in your thing if it is too sensible.