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It's a bit of a non sequitur: having a profitable business is ideal but if a startup can grow fast with VC money it can be acquired for 40x (Wiz) - 1000x (Whats

It's a bit of a non sequitur: having a profitable business is ideal but if a startup can grow fast with VC money it can be acquired for 40x (Wiz) - 1000x (WhatsApp) revenue even if not profitable

altairprime 2y ago
A startup that doesn’t care about making money is a startup that will ignore negative customer feedback if addressing the concerns raised would slow the unicorn’s growing phase. If you’re a stable business, that’s the sort of firm you definitely do not want to hire for key services; the VC involvement is too high an instability to permit. (Advertising is not a key service.)
epolanski 2y ago
Why does it always have to be about maximizing exits at all costs? There's people that simply enjoy their company and working in it, they only luck to sell when they are old and there are no great heirs to the business. And that's true for billion dollar companies too.
- soup10 2y ago
  many businesses are boring or a grind by their nature and would not exist without financial incentive and an exit plan
- tmpz22 2y ago
  Bootstrap = chance of failure, more work because you can't hire a team to do significant amount of work for you VC-funded = Full Salary early, network for future jobs if company fails, shortcuts like joining an incubator and selling to your cohort for early sales figures (which can then be used to get more money)
  - billllll 2y ago
    VC funding is for sure less personal risk, but I don't think the other points are universally true. 1. Re: hiring, you're probably not going to hire your first FTE right after raising money. You're probably going to do so after getting a bit of traction. I hear most investors especially today will push you to be lean and do more yourself. Either way, bootstrap or VC funding, you're going to bust ass, no way around it. 2. Re: salary, yes, some investors will encourage you to pay yourself, but you're probably not paying yourself a "full" salary right away. 3. Re: selling to cohorts is a bit overrated I think. The fact of the matter is, they're probably all early-stage tech startups, which means if you don't have a product that specifically targets early-stage tech startups, you're probably not going to sell to them. I don't think it's as cut and dried as X is better than Y. It really is all about how much risk you want to take on, if VC funding is even an option.
    - bb88 2y ago
      On 2, I've seen this go the other way. The capital is going towards the business and not the (maybe questionable) lifestyle of the founders. Once it's a full fledged business with a steady income stream, an above average salary would then be warranted.
    - JohnFen 2y ago
      > network for future jobs if company fails This is also a thing you get when bootstrapping, if you're bootstrapping correctly.
  - epolanski 2y ago
    VC-funded: you give up equity and control
mmaunder 2y ago
VCs are diversified. Founders are not. Their math checks. Yours does not.
nothercastle 2y ago
Can but most will die trying. The customer will get screwed either way. The VC sees growth or die, the customer gets die or suck. Loose lose for the customer
- OutOfHere 2y ago
  It is why a customer ought to prioritize open source and open everything even if the customer is paying a vendor for support or a service.
dehrmann 2y ago
Maybe I'm just saying what VC wants me to say, but if it's the sort of business a VC would invest in, you need to worry about a competitor blitzscaling over you.
- nothercastle 2y ago
  That’s true but interests of customers are orthogonal to the vc interests
pavel_lishin 2y ago
> if a startup can grow fast with VC money it can be acquired for 40x (Wiz) - 1000x (WhatsApp) revenue even if not profitable How does that help me as a potential user?
taneq 2y ago
I’d think ‘profitable but investing revenue in growth’ Is very different from ‘increasing revenue purchased with investor money’. Being profitable means you’re not beholden to new investors. If your goal is to run a company rather than race for an exit, this lets you make much longer term strategic decisions.

It's a bit of a non sequitur: having a profitable business is ideal but if a startup can grow fast with VC money it can be acquired for 40x (Wiz) - 1000x (WhatsApp) revenue even if not profitable

altairprime 2y ago

A startup that doesn’t care about making money is a startup that will ignore negative customer feedback if addressing the concerns raised would slow the unicorn’s growing phase. If you’re a stable business, that’s the sort of firm you definitely do not want to hire for key services; the VC involvement is too high an instability to permit. (Advertising is not a key service.)

epolanski 2y ago

Why does it always have to be about maximizing exits at all costs? There's people that simply enjoy their company and working in it, they only luck to sell when they are old and there are no great heirs to the business. And that's true for billion dollar companies too.

soup10 2y ago
many businesses are boring or a grind by their nature and would not exist without financial incentive and an exit plan
tmpz22 2y ago
Bootstrap = chance of failure, more work because you can't hire a team to do significant amount of work for you VC-funded = Full Salary early, network for future jobs if company fails, shortcuts like joining an incubator and selling to your cohort for early sales figures (which can then be used to get more money)
- billllll 2y ago
  VC funding is for sure less personal risk, but I don't think the other points are universally true. 1. Re: hiring, you're probably not going to hire your first FTE right after raising money. You're probably going to do so after getting a bit of traction. I hear most investors especially today will push you to be lean and do more yourself. Either way, bootstrap or VC funding, you're going to bust ass, no way around it. 2. Re: salary, yes, some investors will encourage you to pay yourself, but you're probably not paying yourself a "full" salary right away. 3. Re: selling to cohorts is a bit overrated I think. The fact of the matter is, they're probably all early-stage tech startups, which means if you don't have a product that specifically targets early-stage tech startups, you're probably not going to sell to them. I don't think it's as cut and dried as X is better than Y. It really is all about how much risk you want to take on, if VC funding is even an option.
  - bb88 2y ago
    On 2, I've seen this go the other way. The capital is going towards the business and not the (maybe questionable) lifestyle of the founders. Once it's a full fledged business with a steady income stream, an above average salary would then be warranted.
  - JohnFen 2y ago
    > network for future jobs if company fails This is also a thing you get when bootstrapping, if you're bootstrapping correctly.
- epolanski 2y ago
  VC-funded: you give up equity and control

mmaunder 2y ago

VCs are diversified. Founders are not. Their math checks. Yours does not.

nothercastle 2y ago

Can but most will die trying. The customer will get screwed either way. The VC sees growth or die, the customer gets die or suck. Loose lose for the customer

OutOfHere 2y ago
It is why a customer ought to prioritize open source and open everything even if the customer is paying a vendor for support or a service.

dehrmann 2y ago

Maybe I'm just saying what VC wants me to say, but if it's the sort of business a VC would invest in, you need to worry about a competitor blitzscaling over you.

nothercastle 2y ago
That’s true but interests of customers are orthogonal to the vc interests

pavel_lishin 2y ago

> if a startup can grow fast with VC money it can be acquired for 40x (Wiz) - 1000x (WhatsApp) revenue even if not profitable How does that help me as a potential user?

taneq 2y ago

I’d think ‘profitable but investing revenue in growth’ Is very different from ‘increasing revenue purchased with investor money’. Being profitable means you’re not beholden to new investors. If your goal is to run a company rather than race for an exit, this lets you make much longer term strategic decisions.