

How Sequoia forced Tony Hsieh to sell Zappos - pier0
http://blogs.reuters.com/felix-salmon/2010/06/07/how-sequoia-forced-tony-hsieh-to-sell-zappos/

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alttab
or, "How taking venture capital is a risk, and where the control lays even if
you're successful."

(also: _especially_ if you're successful).

Except that Tony Hsieh is now on a committee with Jeff Bezos, and 4 executives
from Amazon and Zappos. It will still operate as their own entity, run by
Tony, and they've basically placated the VCs with Amazon stock while he gets
full control over the company, culture, and with access to Amazon's resources.
They went inside the deal in a couple of places, check out Inc.'s article on
the subject.

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dhimes
_It will still operate as their own entity, run by Tony_

For now, at least. As _staunch_ commented on the other thread
(<http://news.ycombinator.com/item?id=1409915>), this is still really a
honeymoon period.

~~~
alttab
By the looks of it, as long as he continues to reach his numbers he'll have
things the way he wants it. Not to say that he got out Scott-free, but in this
case he at least gave himself control over his own destiny.

It was the price he paid to get the company where it was that he was in that
bind (a good bind to be in, if you ask me), and the best move he could have
made to keep the company and the destiny of the culture in his hands.

 _(Edit: An argument against this case would be Tivoli. It was bought out by
IBM and slowly the cultures merged.)_

~~~
irrelative
...as long as he continues to reach his numbers. The real position he wanted
to be in was to be able to ignore short term numbers for long term
positioning. I think it's safe to say he can't really do that anymore.

~~~
alttab
I agree. His move was still better than having the VCs choose the highest
bidder leaving him without a company to run. I think he reached a local
maximum given his situation.

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ashbrahma
It's rather interesting that Alfred Lin, the other board member who opposed
the VC board, ended up going to work for Sequoia Capital..

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hga
Maybe he wants to apply the cluebat from the inside? If some at Sequoia saw
the wisdom in what they were saying, that might have been why they hired
him....

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edash
This piece pulls long quotes the INC article with little added value.

If you want to get the whole story, support the original publisher and read
what several commenters considered the best article they'd read all day...skip
this and read the original:

<http://news.ycombinator.com/item?id=1409858>

~~~
hga
I strongly disagree: the author is trying to make a specific point, mostly by
using long quotes from the original article, but he adds various links about
the point and his own commentary.

And it's an important point: if you accept VC money in this post-Sarbox don't
expect an IPO exit environment keeping control is going to be nearly
impossible. The best possible outcome is selling your company to another and
most of the time that doesn't end happily for the founders.

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Scott_MacGregor
"— “Tony’s social experiments,” they called it…" I think I understand what
they mean by this.

