It seems to me that the real winners in such deals are the investors. They put some money into this company, those dudes work extremely hard for a year, while the investors chillax, then they sell off. The investors make a nice chunk of change, while these dudes transfer to another company where they will continue to work extremely hard for another year or more.
To me, 'startups' are not really companies. They are vehicles for speculative activity by a certain class of people. All those drones being encouraged into spending so much time working in these companies so that investors will make money could also work on creating real businesses that they own and that will make them real money.
Both founders and VCs deal with a lot of risk, but in doing so, they have the potential for high reward. If the money (the and post-acquisition gameplan) are agreeable to the founders, are they too not "real winners"?
In being acquired, the founders are exchanging a potentially long-term successful business for near-term security and presumably good money. Perhaps the founders wanted to spend more time on their product and less time on their business...Different people have different motivations, and money is by no means the only determining factor of whether one is a "real winner".
At least the founders own the company and they sell if they like the deal, not if their boss does or some corporate decision-maker thousands of miles away. (assuming they didn't raise several rounds of VC funding and got diluted enough to lose control).
You've got it exactly backwards. So exactly, in fact, that it looks like trolling, but oh well...
I know nothing about Fanvibe's acquisition, but typically in these cases it's the "dudes" who control the business and they're selling it because they want to, because it's making them a life-changing amount of money.
Meanwhile the investors make a small return but lose the chance of a big return, which is what they really need in order to succeed at startup investing. Good investors support the founders anyway, because they know it's not in their interest to thwart them and also because they are often nice people who are happy to see the "dudes" succeed.
An investor puts $20k in 15 companies and gets perhaps $50k back. Over the sum of his companies he's getting quite a lot of money for doing nothing but having a few dinners and answering some emails.
On the other hand, these guys are making perhaps $300k each, which they can easily make as highly capable consultants. And they end up with nothing much after that, just the chance to work even more.
The problem is not venture capitalists, it's those "brand name" investors who are putting $20k in many many companies.
The "brand name" investors are exactly the ones that don't "chillax". Casual angel investors usually lose money. The ones that have strong deal-flow don't get that by just occasionally showing up in Mountain View with a checkbook. Also note that most of the "super angels" at this point are really just mini-VCs. Conway, McClure, Sacca, et al are mostly investing other people's money.
Ok, I buy that you're not trolling, but you're assuming your conclusion. How do you know the investor gets $50K back? It's a lot harder to make money off startups than that.
If what you're saying is true, then founders in general (who leap at the chance to take these deals) are dupes. That doesn't seem very likely.
I think it's a win-win scenario in the cases you describe. YC model works the best with these who are technically savvy but lacking business experience due to their young age. After being acquired they become real entrepreneurs who have more potential for a bigger venture in the future.
And I have to say, I've rarely seen a post about being acquired that sounded so happy about it. Really seems like you'll enjoy working at beRecruited, so best of luck to you!
"Remember that your mind is a fortress of impenetrable happiness."
Common words of wisdom that never seem to be taken to heart nearly enough. Reminded me of another gem from Daniel Gross of Greplin:
"It’s very important to constantly tell yourself if anything, how lucky you are to be here in the first place. Even if you aren’t in the valley, remember how lucky you are to live in the 21st century."
Congrats Art! Thanks for showing us what fortresses can do ;)
I'm more curious about whether or not the founders felt Fanvibe's business model was a successful one. Did they feel they reached an optimal product/market fit? Or was there potentially more to give?
I've been doing research in the space(s) of sports & gaming, particularly in-game predictions, which I think can be super compelling in the right context. While I wasn't that enthralled with other aspects of the product, I.E. checking in to games (why, when I can just use a location-based service?), trash talking with other fans (can do that via social media, along with team-centric blogs/forums) etc, it seemed like Fanvibe was ahead of the curve with this in-game prediction element; at least from a non-gambling perspective.
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[ 3.1 ms ] story [ 47.4 ms ] threadTo me, 'startups' are not really companies. They are vehicles for speculative activity by a certain class of people. All those drones being encouraged into spending so much time working in these companies so that investors will make money could also work on creating real businesses that they own and that will make them real money.
The point of starting a business is to grow and maintain something.
In being acquired, the founders are exchanging a potentially long-term successful business for near-term security and presumably good money. Perhaps the founders wanted to spend more time on their product and less time on their business...Different people have different motivations, and money is by no means the only determining factor of whether one is a "real winner".
I know nothing about Fanvibe's acquisition, but typically in these cases it's the "dudes" who control the business and they're selling it because they want to, because it's making them a life-changing amount of money.
Meanwhile the investors make a small return but lose the chance of a big return, which is what they really need in order to succeed at startup investing. Good investors support the founders anyway, because they know it's not in their interest to thwart them and also because they are often nice people who are happy to see the "dudes" succeed.
On the other hand, these guys are making perhaps $300k each, which they can easily make as highly capable consultants. And they end up with nothing much after that, just the chance to work even more.
The problem is not venture capitalists, it's those "brand name" investors who are putting $20k in many many companies.
If what you're saying is true, then founders in general (who leap at the chance to take these deals) are dupes. That doesn't seem very likely.
And I have to say, I've rarely seen a post about being acquired that sounded so happy about it. Really seems like you'll enjoy working at beRecruited, so best of luck to you!
"Remember that your mind is a fortress of impenetrable happiness."
Common words of wisdom that never seem to be taken to heart nearly enough. Reminded me of another gem from Daniel Gross of Greplin:
"It’s very important to constantly tell yourself if anything, how lucky you are to be here in the first place. Even if you aren’t in the valley, remember how lucky you are to live in the 21st century."
Congrats Art! Thanks for showing us what fortresses can do ;)
I've been doing research in the space(s) of sports & gaming, particularly in-game predictions, which I think can be super compelling in the right context. While I wasn't that enthralled with other aspects of the product, I.E. checking in to games (why, when I can just use a location-based service?), trash talking with other fans (can do that via social media, along with team-centric blogs/forums) etc, it seemed like Fanvibe was ahead of the curve with this in-game prediction element; at least from a non-gambling perspective.
Just curious what their thoughts were on this.