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raising funds != success What was that comparison? No one says, "congratulations on that huge loan you just took out!". I'm sure the team was great, but I'm c

by phillmv 14y ago

raising funds != success What was that comparison? No one says, "congratulations on that huge loan you just took out!". I'm sure the team was great, but I'm confused as to why we should be lauding this state of affairs. If they were making money, then why should they all have up and left to go work at Yahoo!? From the, admittedly poor on information and high on snark, position I'm comfortably seated on it seems like you had a great team that was wonderfully subsidized by VC that managed to save face with an 'exit'. I'm sure it's really fun to go through the motions, but I don't really see the part where they added value; I only see an elaborate social signaling event (again, obviously the team is competent, filled with A players) fully subsidized by Yahoo! shareholders. If I'm missing out on something I'd love to know about it.

jmathai 14y ago
raising funds != taking a loan And if you've ever raised funds then yes, it's an accomplishment and cause to celebrate. Just get back to work the next day.
- 001sky 14y ago
  reference > http://en.wikipedia.org/wiki/Modigliani%E2%80%93Miller_theorem http://en.wikipedia.org/wiki/Modigliani%E2%80%93Miller_theor...
  - saraid216 14y ago
    Raising the value of your firm is not the only reason to celebrate as a company; successfully making it possible to continue operating/expanding for another year is a good thing.
    - joonix 14y ago
      And a loan would let you do the same. The comparison is valid. For some reason there's a stigma against debt financing because it has to be "paid back" in installments. Equity financing still has to be paid back, the transaction just has different mechanics. Equity investments don't "raise the value" of the firm. They simply signal that other people with money believe you will generate X amount of dollars in the future. Debt financing involves signals, too: the interest rate reflects what other people with money think about your ability to generate X amount of dollars in the future (to hopefully pay back your loan). GE pays a very low interest rate on its bonds because of its value and perceived ability to pay back debt.
      - saraid216 14y ago
        You don't seem to be disagreeing with me.
        001sky 14y ago
        making it possible to continue operating/expanding for another year is a good thing This is not true if you are destroying value, so its not true per-se. A Junkie with an Amex black meets this definition of success, for example.
nswans 14y ago
I wasn't equating funding with success. I was saying that labeling the product and company a failure even though very smart people who do this for a living have recently put their money behind the company is a leap. If the company was failing, why would these investors put in their money? I'm not "lauding", I stated that it appears like the move that both sides want to make. A small company gets to take the lead on mobile where they can potentially make a very big difference, much bigger than they could make with their existing company, and really a rare opportunity that not many people get. Mayer gets good talent that she trusts to help lead an important part of her organization. If it works out like they all plan, then it makes those Yahoo! shareholders who subsidized that acquihire very happy.

by phillmv 14y ago

jmathai 14y ago

raising funds != taking a loan And if you've ever raised funds then yes, it's an accomplishment and cause to celebrate. Just get back to work the next day.

001sky 14y ago
reference > http://en.wikipedia.org/wiki/Modigliani%E2%80%93Miller_theorem http://en.wikipedia.org/wiki/Modigliani%E2%80%93Miller_theor...
- saraid216 14y ago
  Raising the value of your firm is not the only reason to celebrate as a company; successfully making it possible to continue operating/expanding for another year is a good thing.
  - joonix 14y ago
    And a loan would let you do the same. The comparison is valid. For some reason there's a stigma against debt financing because it has to be "paid back" in installments. Equity financing still has to be paid back, the transaction just has different mechanics. Equity investments don't "raise the value" of the firm. They simply signal that other people with money believe you will generate X amount of dollars in the future. Debt financing involves signals, too: the interest rate reflects what other people with money think about your ability to generate X amount of dollars in the future (to hopefully pay back your loan). GE pays a very low interest rate on its bonds because of its value and perceived ability to pay back debt.
    - saraid216 14y ago
      You don't seem to be disagreeing with me.
      - 001sky 14y ago
        making it possible to continue operating/expanding for another year is a good thing This is not true if you are destroying value, so its not true per-se. A Junkie with an Amex black meets this definition of success, for example.

nswans 14y ago

I wasn't equating funding with success. I was saying that labeling the product and company a failure even though very smart people who do this for a living have recently put their money behind the company is a leap. If the company was failing, why would these investors put in their money? I'm not "lauding", I stated that it appears like the move that both sides want to make. A small company gets to take the lead on mobile where they can potentially make a very big difference, much bigger than they could make with their existing company, and really a rare opportunity that not many people get. Mayer gets good talent that she trusts to help lead an important part of her organization. If it works out like they all plan, then it makes those Yahoo! shareholders who subsidized that acquihire very happy.