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You could, but that's the difference between anecdotes and data. Can you really look at my 2 bullet points and say, "I think the data would show those to be fal

You could, but that's the difference between anecdotes and data. Can you really look at my 2 bullet points and say, "I think the data would show those to be false?" There've been studies showing this stuff (PG actually mentioned one during YC, if I recall correctly). Don't have 'em handy. The truth (supported by data) is that large dollar exits are vanishingly rare without outside funding (but sure-- they've happened). Can you name 1 large exit or IPO that had no Series A round? Can you name 5? Note that I'm NOT saying that outside funding increasing your chance of survival (I'd GUESS that the funding path is a riskier one) "The few that make many multiples are what make their firms." Absolutely. For all I know, a Series A REDUCES your chance of business survival... But the data shows that it increases your shot at a big exit (which is what a lot of people are in the game for).

jacquesm 17y ago
I wished I could disagree with you :) It's absolutely true, a series A is like a lottery ticket, suddenly you're a gambler, no longer working day to day to make ends meet, but the clock is running and you have to 'score' at a much higher level than you would have to score at without that investment. Your chances of 'scoring' just went up, but your chances of staying alive just went down about as much. It would be nice to see an analysis of how outside investment changes the sum total, in other words, is this a 'zero-sum-game' and are the 'funded' companies taking away as much by their much bigger chances at collapse than what they would have made if none of them got funded (keep in mind that lots of money gets lost not only because these businesses fail, but they also take their investors money down the hole with them) or is the capital injection a net gain ? Incidentally, I know of one very successful exit (and IPO) that was done without outside investments but it was in the mid-80's, not related to online business, and I know of one online venture that got bought out for a fairly ridiculous amount of money. But that's the total score.

jacquesm 17y ago

I wished I could disagree with you :) It's absolutely true, a series A is like a lottery ticket, suddenly you're a gambler, no longer working day to day to make ends meet, but the clock is running and you have to 'score' at a much higher level than you would have to score at without that investment. Your chances of 'scoring' just went up, but your chances of staying alive just went down about as much. It would be nice to see an analysis of how outside investment changes the sum total, in other words, is this a 'zero-sum-game' and are the 'funded' companies taking away as much by their much bigger chances at collapse than what they would have made if none of them got funded (keep in mind that lots of money gets lost not only because these businesses fail, but they also take their investors money down the hole with them) or is the capital injection a net gain ? Incidentally, I know of one very successful exit (and IPO) that was done without outside investments but it was in the mid-80's, not related to online business, and I know of one online venture that got bought out for a fairly ridiculous amount of money. But that's the total score.