Don't Take VC Funding – It Will Destroy Your Company \ stacker news ~tech

Don't Take VC Funding – It Will Destroy Your Company www.eidel.io/2023/07/09/vc-funding/

1219 sats \ 9 comments \ @hn 9 Jul 2023 tech

210 sats \ 1 reply \ @gmd 9 Jul 2023

Damn, heavy story in the comments about one of the founders of CloudFlare: https://www.wired.com/story/lee-holloway-devastating-decline-brilliant-young-coder/

99 sats \ 0 replies \ @k00b 9 Jul 2023

So sad.

I was expecting him to get pushed out of the company but this is so much worse.

99 sats \ 4 replies \ @k00b 9 Jul 2023

VC Funding Means You Will Sell Your Company

This isn't necessarily true. Privately funded companies can pay out dividends to investors. The founder of gumroad has begun doing this with Flexile. While it's fallen out of fashion, it was once common and I suspect we'll begin seeing more of this.

0 sats \ 1 reply \ @DiracDelta 9 Jul 2023

Yeah, that line is total bullshit. 80% of successful exits are acquisitions. Sounds like this person had a mediocre company, got arrogant, played the fiat game looking for a big fiat handout, and is now butthurt because he would have been better off simply building an honest business.

But given that he writes thinkboi content like this, he has up and coming VC fund manager written all over him. Not even joking. Mediocre founder to VC (or Bitcoin thinkboi, e.g. Jeff Booth) pathway is solid 😂

Though your premise around dividends is dead wrong. I wish it were not, and I get why you want that to be true, but it isn't yet. Equities must not have monetary premiums for that to not be a very lousy strategy. StackerNews could end up being a stellar business, but investment math does not work without premium... and if you're being honest, you know that, because you know $25m is not anywhere near a reasonable valuation for discounted future cashflows.

Equities will become more monetized, not less, as fiat continues to die. Only once fiat is dead will equities lose their money-ness.

Edit: this is why everything Odell and 1031 crew say around SatsFlow is RETARDED. Odell and that other 1031 guy, STOP BEING SOUND ECONOMY LARPERS!!! OK? If bitcoiners can't be intellectually honest, it bodes poorly for the soundness of capital allocation in the immediate decades that will follow hyperbitcoinization... but over the past year I have had to face the reality that that is likely the case. Oh well.

33 sats \ 0 replies \ @k00b 10 Jul 2023

I don’t think about this stuff, because it’s silly to think this business or any business at this stage will ever get the point where it matters.

I saw the dividend thing in passing and was surprised by it, but you’re right it’s probably not a panacea.

0 sats \ 1 reply \ @ae52f929c 9 Jul 2023

Whats your plan

33 sats \ 0 replies \ @k00b 9 Jul 2023

My plan is to build the best thing that I can. Everything else is in service to that.

Thinking about how SN returns money to investors requires compounding 5-10 years worth of hypotheticals. To the extent that I think about it, I think about minimizing worst case scenarios so that I can continue building the best thing that I can.

33 sats \ 0 replies \ @hn OP 9 Jul 2023

This link was posted by olieidel 1 hour ago on HN. It received 214 points and 118 comments.

0 sats \ 0 replies \ @DiracDelta 9 Jul 2023

Don't care, didn't read.

tl;dr: if you either have a real company that is extremely valuable OR you have a good ponzi substrate, take the fiat, turn into bitcoin.

If you have a real business that works, but can only grow so large, be honest with yourself, and know if "ponzi substrate" opportunity vanishes, you are probably fucked if you took VC due to liquidity preference stack.

If you play the fiat game, know the rules. There is no blanket answer. Articles with titles like this annoy me.