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Comment by jasonlotito | Hacker News Reader

"Success is satisfying paying customers over and over again."

Providing value.

I'll be honest. I never understand why people get so excited when a company announces it's looking for funding. To me, if you are looking for funding after a product has launched, it just seems backwards. After all, if your product was good, it wouldn't need funding after it launched.

I guess the idea with this is you need to spend a lot to bring it to a point where it's profitable. Google is an example where profit really couldn't exist until it grew large enough, and it couldn't really grow large enough without money, etc. Facebook is the same way. Twitter, too (Okay, does Twitter actually make money? Is it in the black?). But all these things focus on making money via advertising.

Anyways, enough of my useless questions. It was a good read.

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The idea that once you launch your product you shouldn't need funding doesn't seem intuitive to me. Sure writing code is hard, but there is a lot that goes on after your initial launch, and a lot of these things cost money (like sales, marketing, etc.).

I'm sorry if I wasn't clear. I'm not against funding. It just seems like getting fund to start up, and then additional funding after you've launched seems odd. Sales, marketing, etc, should be covered with the initial investment. Needing more money just sounds like poor planning or foresight.

Twitter is profitable: http://mashable.com/2009/12/21/twitter-is-already-profitable...

was in 2009*

I wonder what day they stop being YTD profitable...

if your product was good, it wouldn't need funding after it launched.

Simplified example:

You have a customer acquisition cost of $10, and lifetime customer value is roughly $50. Average customer duration is 18 months. You expect this situation to last for 5 years. Your addressable target market has a population of approximately 20m individuals.

Ignoring all other factors, would you rather have:

a) 100% equity, and a $100k marketing budget?

b) 50% equity, and a $1m marketing budget?

c) 20% equity, and a $5m marketing budget?

What does that have to do with getting additional funding after you've launched?

I think I worded myself poorly. It's not initial funding I find odd. It's additional funding. You go out, get funding. Yay! Funding! Pays for starting the company and making it profitable. I just naturally ASSuMEd that your initial funding would cover startup costs, including marketing.

At least, that's the way my partners and I did it. Came up with an idea, setup initial work, got funding, launched on that funding. Maybe I'm just looking at it the wrong way (which I am sure is the reason).

What does that have to do with getting additional funding after you've launched?

You're kidding, right? I gave an example in which you've launched, have a profitable product, have $100k in the bank, and are debating the merits additional funding.

In my example, the additional funding will put a LOT of extra money in your pockets, even though you'll dilute your equity, and even though you'd have a profitable business without it.

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