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So is the business model of these projects - 1. build a popular dev tool 2. aquire funding 3. hire great talent 4. pray for an aqui-hire that justifies the init
by yuppiepuppie 4mo ago
So is the business model of these projects - 1. build a popular dev tool 2. aquire funding 3. hire great talent 4. pray for an aqui-hire that justifies the initial funding amount
I wonder how the initial investors feel about the aqui-hire path... Must be a pretty nice sum for them to agree to it, or they saw that the path to any revenue was near impossible/non-existant
- embedding-shape 4mo ago> So is the business model of these projects - 1. build a popular dev tool 2. aquire funding 3. hire great talent 4. pray for an aqui-hire that justifies the initial funding amount Indeed, so as a library/framework/engine/runtime user, for the last decade or so, I've basically avoided anything that touched VC-investments, as eventually the tool will either degrade, get too expensive or straight up disappear, and I got so tired of having to refactor and move stuff around just because new owner did something shitty.
- AdeCodechise 4mo agoHey there embedding-shape -- my name is Adrian Bridgwater and I'm a technology journalist that has enjoyed the realism of your comment here, can I contact you for a follow up comment? I'm here at LinkedIn to start with https://www.linkedin.com/in/adrianbridgwater/ https://www.linkedin.com/in/adrianbridgwater/
- embedding-shape 4mo agoSure, reach out via my email that's in my profile, I don't have LinkedIn :)
- stackskipton 4mo agoMy guess is investors are getting a good return on investment so they are probably pretty happy.
- yuppiepuppie 4mo agoThey've raised over $16 million [0]. For a decent 3-5x return for that, they would need to have been acquired for around ~$50 million. For a team of 19 [1], thats around $2.5 million per employee for Cloudflare. Worth it? no idea [0] https://voidzero.dev/posts/announcing-series-a https://voidzero.dev/posts/announcing-series-a [1] https://voidzero.dev/about https://voidzero.dev/about
- stackskipton 4mo agoI could see Cloudflare wanting them for 50 Million. Cloudflare recent acquisitions have clearly been "buy tools with heavy lock in" and companies shipping on Void are likely heavily locked in.
- benoau 4mo agoIsn't their revenue just sponsorships and donations? This seems like a company destined to scrape by despite their popularity, like Tailwind. You don't get $50 million for that.
- ameliaquining 4mo agovoid.cloud was their revenue plan, but it was still in private beta at this point.
- stackskipton 4mo agoThey have a cloud they already built on Cloudflare. Cloudflare probably thinks they can quickly launch that and that's locked in, steady revenue source.
- bix6 4mo agoPresumably that $12M A was around $50M Val so they need to sell for substantially more to give investors a multiple return.
- 4mo ago
- debarshri 4mo agoAcquisition happen for 3 reasons. 1. Product 2. Talent 3. Business/growth In the AI era, some of acquisition happening in the space is for talent and product. In this case, it looks like it was that. Vite is a great product they were able to build a great team. You would be surprised how much of a premium companies can pay for talent.
- bflesch 4mo agoYour listing is not exhaustive - startups can also be acquired for politics, for marketing purposes, whatever. There is a lot of meat space things going on in the upper echelons of the US tech industry. Recent history shows that an idealized view only focusing on fiduciary duty does not capture the whole picture of business in the USA.
- sophacles 4mo agoRarely does one acquire dollars for the sake of having dollars. Dollars are power tokens, and the acquisition of them beyond a certain point is almost always accompanied by a motive.
- drewda 4mo agoIn many cases the acquiring company shares investors or board members with the acqui-hired entity. To put it neutrally, VC partners are treating these are parts of their same portfolios, so if one team doesn't pan out on its own, it can be merged into another with somewhat similar overall goals or markets. To put it more pointedly, it's perhaps all about who one knows and making sure that everyone gets to tell a story of successful exits.
- thethimble 4mo ago> it's perhaps all about who one knows and making sure that everyone gets to tell a story of successful exits. No. It's all about building a great product that people love. Vite is a foundational tool in the JS ecosystem. Acquihiring the tool/team is entirely downstream from creating a foundational product.
- seanclayton 4mo agoVite isn't a product. It's a tool. It will be succeeded if necessary. It happened to Webpack after Microsoft hired the creator, and the JS community pivoted hard. Bundlers and compilers in the JS world happen once a decade it appears.
- sophacles 4mo agoI was at the hardware store this morning. I bought a hammer. It sure seemed like a product... with the whole "being displayed on store shelves" and "available for purchase" thing. There were several different hammers there, bearing different branding and having different manufacturers. I don't quite get the distinction...
- senordevnyc 4mo agoYou paid for the hammer. Did you pay for Vite?
- 4mo ago
- overfeed 4mo ago> Must be a pretty nice sum for them to agree to it Not necessarily: if the investors don't agree to a reasonable amount, the wanna-be acquirer will simply hire the entire team with generous sign-on bonuses, and the investors will be left with a shell of a company. In this case, the core product is MIT-licensed, the team can quit on a Friday and pick up exactly where they left off under a new org on Monday.
- bix6 4mo agoNot necessarily. There are likely key person clauses in the prior round docs.
- overfeed 4mo agoIt has happened in the recent past (2-4 years ago?); I can't remember both the acquirer and the hollowed-out startup, and searches are returning chaff, but it got to the HN frontpage. IANAL, but at-will employment cuts both ways- thr best an employer can do on behalf of investors, are golden handcuffs - and people can be bought out of those.
- borski 4mo agoThat’s not quite actually true and it is a bit more nuanced than that. For example, while non-competes and non-solicits are unenforceable in CA for employment agreements, they absolutely are enforceable for mergers and acquisitions. The laws governing employment are a subset of the laws governing M&A.
- rconti 4mo agoI mean, the alternative is a whole bunch of BS dealing with funding, global compliance and sales, public markets, etc. It's more fun to just build the fun bits, get acquired, walk away with a lot of money, and start over again doing the fun bits (if you want to keep working).
- tdrz 4mo agoIf you get acquihired, you don't get to walk away.
- dbbk 4mo agoNo their business model was a Vercel-like deployment platform that wrapped Cloudflare to make it simpler.