Google, Microsoft Bidding For Digg | Hacker News Reader

Google, Microsoft Bidding For Digg

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23 pointshwork6 comments

What is it that Digg has done that has cost them 11 million in funding? Didn't Reddit do the same type of thing with around $100,000 total money invested? I know that they've scaled up to 50 employees, and that's where their burn rate goes, but has it really meant a better product?

I keep coming up against this idea that VC money is increasingly becoming a competitive disadvantage. It seems that the companies that have taken VC money end up having to go for much higher valuations to exit, otherwise the VC's don't get theirs. Meanwhile, companies that have managed to get by on no funding or on angel funding alone are able to exit much sooner for much lower valuations, and the founders probably make out just as well if not better.

Rumor mill has it that Digg has been on the market for several years now. I have to imagine that part of that inability to sell the company has been because of it's 2 rounds of VC funding.

Couple of thoughts: one, just because they've raised 11 million, doesn't mean that they've actually used all of it. Granted, having 40+ employees (according to their About Us page), is a significant drain on their cashflow, but I haven't seen what their earnings are. It's possible that they haven't used up their funding completely (or at all).

Two, I'm totally with you on the value to founders between taking lots of funding and getting a massive exit vs. taking a little bit of funding and having a lower exit. It may not translate into two radically different paydays. If anyone has any more insight into this, I'd be interested to know.

Looks like their valuation hasn't changed much in a year and a half:

http://www.businessweek.com/magazine/content/06_33/b3997001....

"People in the know say Digg is easily worth more than $200M"

Actually it has gone way way down: $200M is worth a lot less than it was a year and a half ago =) (except as measured by the amount of real estate you could buy with it...).

That is what we call "a good problem to have."

doesnt work...hwork

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