

Startup to IPO: Part 2: Obstacles - joannetse
http://scale.cc/2009/07/15/startup-to-ipo-why-few-companies-make-the-leap-and-what-we-can-learn-from-them-part-2/

======
tptacek
We'd be out of business now if we had gotten VC in 2005. From the VC-funded
companies I've been in before, getting VC seems like getting shot out of a
cannon. There are no course corrections that don't involve big splotches of
blood and viscera. You better be aimed correctly.

We didn't know enough in '05. We've watched 5 other companies launch the
product we were planning to launch. One of them eventually took in over $80MM
(!) in funding. The market hasn't panned out. We got to watch that all play
out, see what worked and didn't work, and retool, all while building up a
profitable line of business.

Just another reason, besides "it makes you work really hard", why not getting
VC can be a win.

~~~
joannetse
Thanks so much for sharing your experience. I wonder what your competitor did
with that $80MM!

~~~
tptacek
Presumably:

* Several million dollars in inventory

* A 20 region global direct sales team, likely each consisting of a 130k base account manager and 2 90k-100k SE's

* Several million dollars a year in "marketing", including 20-50k/mo in PR firms (note: we got more press hits over the last 4 years than they did), 100k+ in Gartner subscriptions, magazine ads, and 4-5 $100k+ conference visits a year.

* 4-5 120k+ overhead head count for middle management, like a VP/Marketing, Director/Marketing, and Sr Mgr/Marketing, or 3 layers of engineering management.

* A ridiculously outsized engineering department with 1:1 or worse dev/QA.

I'm sure I'm missing some other ludicrous VC-funded-company expense than a
50+MM funded company goes through (I've been through that firsthand), but all
I'll say here is, there's nothing I think they spent that money on that I want
for my company now.

------
paulbaumgart
I'm not really convinced VistaPrint is the best example to learn from.
Allegedly, they do some pretty shady things with their customer data[1][2].
Something about signing people up for some useless service with recurring
monthly fees without their explicit consent.

I guess that's one way to compensate for not getting outside investment, but
it seems pretty shortsighted to me. It certainly was enough to scare me off
when I was ordering business cards a little while back...

[1] <http://www.etsy.com/forums_thread.php?thread_id=5174090> [2]
<http://www.consumeraffairs.com/online/vistaprint.html>

~~~
vincentchan
While I didn't know anything about those useless service, I don't think
Vistaprint becomes a $1.9B company just because they do shady things. As an
entrepreneur, I would love to learn about how others build their companies but
it doesn't mean we have to agree all of their moves.

I don't want to argue about the ethical issues here. But I believe every
company has done something in the gray area. Do you think all those Google ads
on domain parking pages are click scam? I do.

------
iuguy
We've been offered angel investment a few times and whilst I can definitely
see the benefit in small areas of financing, doing it off your own back with
all the blood, sweat and tears that come with it leave you with a pretty
awesome set of abilities.

Leaping over tall buildings in a single bound is one of them I don't think
I'll get round to, but there are times when the things you do pull off are
superhuman by comparison to most people's lives.

------
dan_the_welder
I have always encouraged people to bootstrap.

Nothing sharpens your financial judgment like limited resources.

BTW I just love your cannon/viscera analogy!

~~~
revorad
offtopic: your profile sounds interesting. what's your bike website?

~~~
dan_the_welder
Hi, it's at organicengines.com

~~~
revorad
Looks awesome! I once built the dutch Juan with a bunch of friends. It was so
much fun to build and to ride. Keep up the good work.

