

Ask HN:Anyone here not want an exit? - talbina

What if you are incredibly happy with your leadership position at your start-up, are not too concerned about living a wealthier life, and don't see yourself building something else?<p>This question determines whether I want to raise money since VCs / angels always ask, "What's your exit strategy?".<p>So you have to balance between two views:<p>a.) Raise money, allowing your operation to possibly grow more because of this, a broader network through the investors for partnerships/advice, and coming to grips with the fact that you will have to sell or your investors will push you for it. Understand that if you are acquired (low chances, but just saying), you will have to work for a behemoth company, and judging from the amount of founders that leave a short while after being acquired, being an employee of one of those companies can hardly be described as exhilarating. Also understand that if you were bought out, you will have more cash in the next 5 years (if you did nothing with it) than if you were to stay at your start-up providing yourself a salary for the next 5 years, even taking into account increased salary from growing the company (without VC money) during those years.<p>b.) Don't raise money, keep living off your salary (if any), reduce the direct and indirect transaction costs of having investors, and possibly lower growth opportunities (no money to hire more staff, etc..).<p>So anybody here not looking forward for an exit?
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spiralganglion
My startup isn't accepting VC and we're not looking for an exit. If we get
funding, it'll be for one of our (many) products, but never the company
itself. It is imperative that we maintain 100% autonomy, even if it means
risking our very survival.

As for why, it is because the work we're doing (a particular style of video
game) is unproven in the market, and we need to be able to take substantial
risks, again and again, where we stand to lose a lot of money. We can't afford
to have any external interests guiding these decisions. We're doing this work
for love of the work, so an exit would be ridiculous.

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frederickcook
Interestingly, some of the most successful startups today may never "exit".
Facebook seems to want to avoid an IPO if they can, and Mark Pincus from Zynga
has said he hope he can exist as a privately held corporation indefinitely.
[1]

SecondMarket creates liquidity for investors, founders, and employees while
allowing the company to still maintain some control of how many investors they
have.

At NextGenConf a few weeks ago, Peter Thiel specifically said Clarium prefers
to invest in companies that can be successful without any exit. [Can't find a
ref here, taken from my notes.]

[1] <http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2311>

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talbina
>Peter Thiel specifically said Clarium prefers to invest in companies that can
be successful without any exit.

So how does he get his return? By selling his shares to others?

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frederickcook
Yes, SecondMarket specifically provides liquidity for private companies.
Again, I can't find a reference, but I believe Thiel has sold over half his
original Facebook stock already in this manner.

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switch
What about option c.

Make a ton of money. Stay private.

There's some sort of mind-brainwash that the only way to build a company is to
get funding by giving some middle aged man who doesn't have the balls to take
big risks himself a large share of your company.

It's the Internet. You don't need a lot of capital.

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btilly
If you don't want an exit, you're not alone. To name just one famous example,
Tim O'Reilly has turned down multiple offers over the years to sell O'Reilly
for much more money than the company is worth.

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rst
Also Craig Newmark.

Different but related: founders (Page, Brin, Jobs, Ellison) who stayed
involved after IPO. The VCs have an exit in those cases, but the founders
stick around.

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pgroves
I'm always suspicious of founders that want an exit. Am I really to believe
they think they're doing their life's work and trying to save the world if
they want to be done with it in a few years? Do they really think of it as
their baby if they'd happily sell it and never see it again?

If I was a V.C., I would dismiss any founder that answered the "what is your
exit strategy?" question with anything other than a middle finger. A good V.C.
would see it as the V.C.'s job to convince the founder to sell at the right
time.

~~~
keiferski
That's not very fair. Unless you're fortunate enough to be working on your
most passionate, most world-changing idea _right now_ , I don't see the
problem with taking an exit. Many people have passions outside of their
company, so what's wrong with taking the money and using it to fund another
project?

~~~
spiralganglion
I don't think the problem is the action of selling and starting anew. I think
the problem is double-talk.

Either treat your startup like it's your life's work and see it through for as
long as it takes, or treat it like a big project that you're happy to turn
over when something better comes along. But keep the attitudes distinct.

