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Comment by inflatableDodo | Hacker News Reader

>"1.45 million people attended its events in 2016. MAKE: magazine had 125,000 paid subscribers and the company had racked up over one million YouTube subscribers."

This should be able to pay for 22 staff.

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>MAKE: magazine had 125,000 paid subscribers and the company had racked up over one million YouTube subscribers."

Yeah but they are averaging 10k views a video- which is what you would expect from a channel of about 100k subscribers, and they've never really had the views that are typical of 1m subs, so probably something is up there.

Fair, though I would have thought that the best monetisation would come from events and commission on kits and parts. You should expect to, at very best, only just cover your operational costs from the videos and print subscribers. Events on the other hand have the people physically there and, unlike the web, you can be reasonably sure that the people who rented you the building haven't faked the visitor numbers, at least until someone invents better holograms.

Not if you also have to get your VCs the return they are expecting.

I think that there should be an exit clause for VC backed businesses along the lines of, 'well, we were all morons to think this would make everyone wildly rich, but this can be an ongoing business, so lets not shut it down.'

Because investors are paid for taking risk, that decision has to happen at the point of investment. Or, the entrepreneurs would have to be willing to massively sacrifice their upside for their vision.

The exit clause is "don't take VC money if you want to run an ongoing business". Otherwise, the buoyancy of a somewhat profitable business is sunk by the history of leverage, debt, and expectation.

I don't completely understand the logic. After all, if they shut down, the VCs won't get anything, either. So why not keep it running and reap at least little rewards.

Alternatively you should also cut your losses early.

Once you take the funding, you have to spend it all on expanding operations, new staff, marketing, promotions etc. If you then can't generate a profit, unless you raise more rounds the increased expenses are going to kill your business. So in this case the VCs cut their losses instead of giving them more money.

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