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Slight tangent: What are the benefits/reasons for a company to be so public about raising investment? Is just a good opportunity for name recognition boosting P

by netcan 14y ago

Slight tangent: What are the benefits/reasons for a company to be so public about raising investment? Is just a good opportunity for name recognition boosting PR? For some reason, this seems strange https://dl.dropbox.com/u/131615/screenshots/Screen%20shot%202013-04-10%20at%2016.31.27.png https://dl.dropbox.com/u/131615/screenshots/Screen%20shot%20...

jamesjyu 14y ago
One benefit is that if you're going after big businesses and enterprises, they want to make sure your product has longevity. This proves that it's not just a couple guys in a garage with no resources.
orangethirty 14y ago
There are a couple of good reasons, actually. For one, it improves the morale of the team. Twenty-eight million dollars give a false impression of security to team members. In terms of the market's perception, the perception of company's solidity improves. Don't mind that outside investment is actually a loan (which for me is a risk, and not an asset). The word investment brings in a lot of positive connotations with it. There is also the morale-crunching effect it has on the competition. Everyone else starts to scramble in order to raise money, instead of actually improving their offerings. Its a weird psychological effect mostly found on founders. Investment announcements from competitors make them suffer a lot, and a fair amount simply lose concentration and or quit.
- cookingrobot 14y ago
  How is stock sale a loan?
- jacquesm 14y ago
  A series 'B' round is not a loan, and it is definitely not a risk but a huge asset.
  - robryan 14y ago
    It can be a risk, it redefines the kind of exits you can have in future and still be successful. The founders would likely see little now from a $50 mil sale where as that would be a big windfall for a bootstrapped or angel invested only company.
    - jacquesm 14y ago
      You trade one risk for another, and you are ignoring that post money optimizely has $28M in the bank so it's balance sheet is simply $28M fatter than it was pre-money. A buyer would simply be buying cash and would have no problem with paying $78M. If optimizely now spends this $78M in a way that does not contribute to the balance sheet (superbowl ads, whatever) then they have limited their future options.
jacquesm 14y ago
Validation and free press are really good reasons to go public about raising an investment, you also signal to potential customers that you are now in for the long haul and have a serious warchest so you are not going to go out of business any time soon. This communicates that you're a safe bet when it comes to investing time, money and manpower into integrating the product.

by netcan 14y ago

jamesjyu 14y ago

One benefit is that if you're going after big businesses and enterprises, they want to make sure your product has longevity. This proves that it's not just a couple guys in a garage with no resources.

orangethirty 14y ago

There are a couple of good reasons, actually. For one, it improves the morale of the team. Twenty-eight million dollars give a false impression of security to team members. In terms of the market's perception, the perception of company's solidity improves. Don't mind that outside investment is actually a loan (which for me is a risk, and not an asset). The word investment brings in a lot of positive connotations with it. There is also the morale-crunching effect it has on the competition. Everyone else starts to scramble in order to raise money, instead of actually improving their offerings. Its a weird psychological effect mostly found on founders. Investment announcements from competitors make them suffer a lot, and a fair amount simply lose concentration and or quit.

cookingrobot 14y ago
How is stock sale a loan?
jacquesm 14y ago
A series 'B' round is not a loan, and it is definitely not a risk but a huge asset.
- robryan 14y ago
  It can be a risk, it redefines the kind of exits you can have in future and still be successful. The founders would likely see little now from a $50 mil sale where as that would be a big windfall for a bootstrapped or angel invested only company.
  - jacquesm 14y ago
    You trade one risk for another, and you are ignoring that post money optimizely has $28M in the bank so it's balance sheet is simply $28M fatter than it was pre-money. A buyer would simply be buying cash and would have no problem with paying $78M. If optimizely now spends this $78M in a way that does not contribute to the balance sheet (superbowl ads, whatever) then they have limited their future options.

jacquesm 14y ago

Validation and free press are really good reasons to go public about raising an investment, you also signal to potential customers that you are now in for the long haul and have a serious warchest so you are not going to go out of business any time soon. This communicates that you're a safe bet when it comes to investing time, money and manpower into integrating the product.