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Could you explain why you think any "startup" "needs an exit"? Why should we accept businesses that cannot persist on their own? This comment caught me off gua

by uoaei 1y ago

Could you explain why you think any "startup" "needs an exit"? Why should we accept businesses that cannot persist on their own? This comment caught me off guard with how blatantly VC-sycophantic it is.

FollowingTheDao 1y ago
> Could you explain why you think any "startup" "needs an exit"? Because it is, and always has been, profit over product (and people).
- SilverElfin 1y ago
  But how can the product exist if people don’t make enough profit? Why would they take on the risk and stress of building a business instead of just taking another job.
SilverElfin 1y ago
It’s very hard for companies to go public these days. There isn’t a willingness for institutions or people to invest in companies that haven’t made it yet. Think about how small companies like Microsoft or Google or Amazon were when they went public. Then think about giant private companies like Stripe or Figma. Now you have to be much larger and more mature, which takes a long time. For employees it means waiting 15-20 years for a payday. How many people can take such a big risk, going half their career underpaid waiting for their options to become something? Companies are meanwhile forced to raise capital that isn’t from the public stock exchanges and that can also go on only for so long. Meanwhile you have these giant companies like Google or whatever who can just copy your great idea/business and throw money or people at it, eventually killing you before you get to exit. Look at how Microsoft abused their Office sales contracts to give away Teams to kill Slack. Eventually that forced Slack to sell to Salesforce. I guess I view it as chicken and egg. If the huge mega corp companies were broken up or heavily regulated maybe smaller companies wouldn’t need mergers and acquisitions as much because they would be more stable in a fair competitive environment. But I’m not an expert in any of this. I’ve just seen others talk about all this when lurking on this website.
- delfinom 1y ago
  >For employees it means waiting 15-20 years for a payday. But why do they deserve a payday? If the public markets aren't willing to buy in to IPOs at the given IPO sale price, then perhaps the company isn't valued at the funding rounds valuations that only come from a small handful of investors?
  - bix6 1y ago
    Exit time has doubled in VC. It is a major problem. Hundreds or thousands of people at a single company might be taking lower salaries in exchange for equity that is unsellable until it goes public (or steeply discounted). Yes sometimes valuations are way too high in private markets but an IPO enables a reset and liquidity. Saying people don’t deserve an exit is saying startups shouldn’t even exist? At some point every company provides liquidity whether it’s stock sales, dividends, merger, etc.
- lesuorac 1y ago
  > Then think about giant private companies like Stripe or Figma. Now you have to be much larger and more mature, which takes a long time. I don't think this is accurate. People are chomping at the bit to invest into private companies through Tokens on Robinhood. Private companies do not want to deal with accountability so they remain private. > I guess I view it as chicken and egg. If the huge mega corp companies were broken up or heavily regulated maybe smaller companies wouldn’t need mergers and acquisitions as much because they would be more stable in a fair competitive environment. If you didn't allow small companies like Skype to sell to Microsoft then there wouldn't be a Teams to bully Salesforce.
  - bix6 1y ago
    Only the top 30 companies have secondary interest. Everyone else is illiquid or takes a steep discount. It’s not healthy for the early stage ecosystem which relies on capital recycling to fund the next generation of managers and founders.
- skybrian 1y ago

by uoaei 1y ago

FollowingTheDao 1y ago

> Could you explain why you think any "startup" "needs an exit"? Because it is, and always has been, profit over product (and people).

SilverElfin 1y ago
But how can the product exist if people don’t make enough profit? Why would they take on the risk and stress of building a business instead of just taking another job.

SilverElfin 1y ago

It’s very hard for companies to go public these days. There isn’t a willingness for institutions or people to invest in companies that haven’t made it yet. Think about how small companies like Microsoft or Google or Amazon were when they went public. Then think about giant private companies like Stripe or Figma. Now you have to be much larger and more mature, which takes a long time. For employees it means waiting 15-20 years for a payday. How many people can take such a big risk, going half their career underpaid waiting for their options to become something? Companies are meanwhile forced to raise capital that isn’t from the public stock exchanges and that can also go on only for so long. Meanwhile you have these giant companies like Google or whatever who can just copy your great idea/business and throw money or people at it, eventually killing you before you get to exit. Look at how Microsoft abused their Office sales contracts to give away Teams to kill Slack. Eventually that forced Slack to sell to Salesforce. I guess I view it as chicken and egg. If the huge mega corp companies were broken up or heavily regulated maybe smaller companies wouldn’t need mergers and acquisitions as much because they would be more stable in a fair competitive environment. But I’m not an expert in any of this. I’ve just seen others talk about all this when lurking on this website.

delfinom 1y ago
>For employees it means waiting 15-20 years for a payday. But why do they deserve a payday? If the public markets aren't willing to buy in to IPOs at the given IPO sale price, then perhaps the company isn't valued at the funding rounds valuations that only come from a small handful of investors?
- bix6 1y ago
  Exit time has doubled in VC. It is a major problem. Hundreds or thousands of people at a single company might be taking lower salaries in exchange for equity that is unsellable until it goes public (or steeply discounted). Yes sometimes valuations are way too high in private markets but an IPO enables a reset and liquidity. Saying people don’t deserve an exit is saying startups shouldn’t even exist? At some point every company provides liquidity whether it’s stock sales, dividends, merger, etc.
lesuorac 1y ago
> Then think about giant private companies like Stripe or Figma. Now you have to be much larger and more mature, which takes a long time. I don't think this is accurate. People are chomping at the bit to invest into private companies through Tokens on Robinhood. Private companies do not want to deal with accountability so they remain private. > I guess I view it as chicken and egg. If the huge mega corp companies were broken up or heavily regulated maybe smaller companies wouldn’t need mergers and acquisitions as much because they would be more stable in a fair competitive environment. If you didn't allow small companies like Skype to sell to Microsoft then there wouldn't be a Teams to bully Salesforce.
- bix6 1y ago
  Only the top 30 companies have secondary interest. Everyone else is illiquid or takes a steep discount. It’s not healthy for the early stage ecosystem which relies on capital recycling to fund the next generation of managers and founders.
skybrian 1y ago