Hacker News new | comments | show | ask | jobs | submit login

"I don't really see how this is a bad thing." They were independent and profitable company. Now they are virtally deep in debt. Everything they do now will be focused on one thing only - how to pay back that debt. They have people on board who's only goal is to get that loan back in multiples. Every decision from now on will be waged against the question "will it pay back the loan". Independency is lost, now we have company in deep dept, doing desperate things to pay it back. Desperate people in desperate situations make desperate decisions...

Yes, founders maybe took some money off he table, that's good for them, no question. But the company is now troubled.

I think you're not talking about GitHub. Because I see A company which started from zero, revolutionized SCS, socialized coding. Makes a lot of cash, not from advertisement, but from an actual useful product. A Product that people love to use. I think A16Z is a very clever firm that invested in a very solid product.

GitHub has 102 employees. Which means they're already paying around $10M wage in a year and they're profitable. I bet they're at least making $20M per year right now. They're going after the enterprise market which would make them much much more cash.

Do the math. Is it really hard to pay that money back in a company like this ? Is AirBnB, Dropbox, Evernote in trouble ?

Github is not troubled.

$10M/year in wage? That would imply $100k per employee per annum. I understand that it was just a budgetary figure, and I understand the premium that employer-side payroll taxes and benefits add - it is very non-trivial. Still, do you suppose the median wage at GitHub is that high? For everyone? Salespeople, receptionists, accounts payable clerks? Are you sure? I should hope they are spending a good bit less on payroll, even gross and with overhead.

Yes. 100k for developers is definitely on the low end (not even including overhead), and for others it might be on the high end, so assuming most of their employees are developers, 10M is a pretty low estimate of their payroll.

I would be very surprised if most of their staff were developers.

No I am not sure and that's not the point...

They aren't in debt. They sold something like one seventh of their company. That's not enough to lose control of the company in any meaningful sense.

Debt-holders don't control a company either. But when you have somebody's money and the expectation you are going to give them a lot more money in return, it changes things.

You're correct that they haven't lost control, but now they have somebody to answer to. Somebody who just gave them $100m. Somebody with more equity than all but a few of the people involved. Somebody who's powerful and respected and whose job is to push tech companies in the direction of maximum return.

It changes things.

Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | DMCA | Apply to YC | Contact