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Worst outcome: just slogging along, not good enough to exit but not bad enough to kill so people can get on with their lives.
by danielweber 13y ago
Worst outcome: just slogging along, not good enough to exit but not bad enough to kill so people can get on with their lives.
- nmjohn 13y agoThat's not all bad though, assuming you are successful enough to be pulling in an equivalent salary to what you could make elsewhere.
- deleted 13y ago[deleted]
- jfoster 13y agoAlso, if you recognize that it's where you are, you still have the option of pivoting it into something bigger.
- danieltillett 13y agoYes for normal companies this is fine, but for VC companies? How long do VCs let companies slog along before the pull the pin? It would seem not that often.
- ganeumann 13y agoVCs never pull the pin, they just refuse to continue funding. If the company is break-even or a little better, it can go sideways for years and years. VCs sometimes used to get a 'redemption right' that allowed them to sell their stock back to the company at price after a certain number of years. I haven't seen that in a while now though.
- danieltillett 13y agoDon't most of the VC funds have a limited life of 10 years? What happens to their shareholding in these sideways companies when the fund wraps up?
- pushkargaikwad 13y agoThey will certainly exit before the fund wraps up
- ganeumann 13y agoThe General Partner of the fund usually has the right to extend the life of their fund for some period of time. Management fees for the time during the extension are negotiated with the Limited Partners. A cliche in the industry is that the average life of a ten year fund is thirteen years. The Limited Partners could force the dissolution of the fund after ten years--the remaining assets, including any private company stock, would be distributed to the LPs--but they generally don't want to deal with direct ownership of the equity of a company going sideways. VCs are usually better at finding creative ways to sell their piece of a business for some small amount of money, so they would rather the VC take the responsibility for it.