

Who else thinks VCs are dinosaurs? - mmaunder
http://markmaunder.com/2007/who-else-thinks-vcs-are-dinosaurs/
John Cook, one of my favorite Seattleites, has a post on his blog about yet another home office no money startup that got bought out for a few million. There is a growing realization that getting funding if you're a developer building a consumer web application is a very bad idea.
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I don't. So far the percentage of companies that go public without at some
point taking VC money is still zero.

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mmaunder
It's the VC that pushes to go public. And if going public is your goal then
it's logical to get into bed with VC's because they have the institutional
connections.

When chatting about liquidity events, most founders I know talk about getting
bought these days before IPO. I've sold a company myself and it's incredibly
easy. No roadshow, no creating investor hype, no complex SEC filings.

Having said all that, I think it's bad karma and bad strategy to start a
company with the goal of selling out. I should also mention that doing neither
(ipo or buyout) is also an option - simply build a very profitable business.

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cperciva
"I think it's bad karma and bad strategy to start a company with the goal of
selling out."

Why? The set of people who are good at building a business is almost disjoint
from the set of people who are good at running an established business. Techs
vs. Suits, so to speak.

I don't think there's anything wrong with starting a business saying "I'm
going to sell this at the inevitable point where someone else can run it
better than I can."

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mmaunder
I think it's a bad idea because your target market becomes your acquirer
instead of your customer. Your business starts morphing into whatever the hot-
new-thing is of the day rather than trying to solve a problem for your
customer.

If your business is successful, the opportunities will come - opportunities to
get funded, get bought, IPO, etc. So your only focus should be to build a
successful business and keep your customer happy.

Hey, I'm not saying that late at night sitting around a fire you shouldn't
dream of riches. Just don't build it into your strategy because you'll end up
being a me-too business.

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cperciva
Fair enough -- I think we agree here, we're just stating things slightly
differently.

The _goal_ should not be to sell out, but there's nothing wrong with aiming to
build a successful business and knowing that being bought is likely to end up
happening in the end.

