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Comment by ryguytilidie | Hacker News Reader

Maybe I'm insane, but when someone says "is the cash worth it to these founders?" when they presumably have the ability to do another startup AND they now have enough money to finance 100 startups and 3 generations of their family, I have to say a very strong yes.

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You're not insane, and I often wonder about how others can criticize someone for accepting such a colossal life-changing offer. If a company were offering me a billion (or $35 million) dollars for my startup provided I delete all user accounts and data and shut down the entire service forever, I'd still take that deal. People will moan about it for days, but a year out they'll have found some other service and I'll be driving around Rome in my r8 dressed as Da Vinci eating as much of the world's best pizza as my stomach can handle, for the rest of my life.

Sounds like you're on the 'deferred life' plan. Drop the startup, get a job in Rome, and start enjoying the pizza. You can't have the fancy car, but you'd get bored of that in a month anyways.

But as I alluded to, at that point, when you're bored, start something new with the new capital and connections you have.

A truism of life:

If you drive an R8 around, eat the best pizza you can and dress as Da Vinci, people will call you crazy and lock you up.

If you drive an R8 around, eat the best pizza you can and dress as Da Vinci when you $35,000,000 in the bank, people pleasantly refer to you as eccentric and like having you around.

Eccentrism is by no means the sole privilege of the rich. Emperor Norton was a famously broke, yet grandiose fellow who was beloved throughout the city of San Francisco in the late 1800s.

http://en.wikipedia.org/wiki/Emperor_Norton

You can draw any line you like through a single data point. But you also kind of missed the original reference.

I suppose having my deferment rubbed in my face like that might rankle

> get a job in Rome

and therein lies the problem - you have to have a job. which kinda precludes you from doing the rest of what you want to do (which mostlikely takes up time and money, for not very much profit, if any at all).

One one hand, you're right. On the other hand, chasing dreams like that is far riskier without substantial cash in the bank.

If it truly is his life dream, then sure - go for it without the money. But a lot of dreams turn out to not be so much fun after a month after all, and the big difference the cash makes is that you don't need to commit. Dreams change? Big deal. Dip into the savings and move/do something entirely different next month.

If you have the money you are free to chase "dreams" that you are a lot less serious about.

As someone who bought his cheapest dream car about 6 years ago, don't blame the car for getting bored. :P

I think that depends on what your startup is. If it's some silly app solving a first world problem that will honestly be replaced by something else in a year, I couldn't agree with you more.

On the other hand, if it's something that really matters, that you really care about, and your goal isn't to make money but to somehow change the world, I can't see anyone taking the same perspective.

That being said, I haven't really seen any startups that do have a goal or mindset like this recently (other than perhaps watsi). That's a totally separate discussion, but still makes me sad.

Your comment is based on the assumption that it's impossible for a founder to really care about a silly app that solves some first world problem. I think more to the crux of the issue here is what the founder wants to do. If they want to make a buck, then I doubt they'd ever regret the buyout. But if they have any emotional attachement at all, regardless of how silly or world-changing the actual product is... well, then whether or not you want to take the money is a valid question.

I can't say for sure what I'd do in that situation, but I do know that the devil I know (me) is far better than the devil I don't (the company trying to purchase my company). I'd like to think that if I was still interested in the company I'd roll on along on my own. (If I wasn't, however, that's an entirely different story.)

Really good response, and you're totally right. I was applying my own personal bias to the comment, and that wasn't fair.

I don't think this is correct. Google, which is world-changing, would have sold out if the prices being offered were higher.

http://www.paulgraham.com/googles.html

Additionally, most large, "world-changing" companies (GE, GM, ExxonMobil, etc.) are public, which is selling out to an extent (usually with good reasons, but it's still selling shares in the company).

This is the same way I feel, or at least how I think I feel right now. I am absolutely passionate about Fogbeam Labs and what we're doing (applying social-networking, machine learning, semantic web, etc. to enterprise software to improve productivity, knowledge sharing, learning, etc.), BUT... if somebody offered me enough money to where I could legitimately walk away with "FU money" it would be damn hard to say no.

I mean, if it was legitimately life-changing money, I could take the buyout, spend a year or two traveling, relaxing, exploring, enjoying the "good life" and looking for a six foot tall redheaded supermodel with a Scottish accent to be my girlfriend... and then, when I got bored with that, I'd have seed money for the next venture already in hand.

OTOH, how do you see your baby? When you pour blood, sweat and tears into something to that point that it's basically your life, how can you just walk away from that with some cash?

So I dunno... which is why I say I think I'd take the buyout, but I can't necessarily swear to it.

Your response feels very real. You can do the things you want to do AND THEN start a company that is more in tune with what you want to do then versus when you started your old startup. Sure you don't have your old startup anymore, but you have something newer and more exciting.

> Sure you don't have your old startup anymore, but you have something newer and more exciting.

or with the newly found money, create a competitor to the startup you just sold! And this time, you don't need to sell out, because you already did on the previous one, and have FU money to truely realize your vision...

That might be possible but a competent buyer will have you agree to a non-compete for a given amount of time (likely a couple years) before a sale is finalized.

For what it's worth, go further south to Naples for better pizza... :)

I think this is especially true for a startup that makes little to no money, and where the users pay $0. If the users complain, just offer a refund. :)

This puts very uncomfortable dynamics between users and startups. Done repetetively it could cause startup fatigue with end users.

knowing that's how you feel, why would I (or anyone) use anything you make?

Maybe what he was selling would be useful to you? If I want to make money, and I want to do it by selling a product I thought made a positive difference to people, would it matter if I also built the company for an acquisition exit as well?

Down vote all you want, I'd still like a rational answer.

The OP suggested 1 billion rational answers. Or 35 million. Or one of those values divided by whatever amount of money it'd take for you to live comfortably for the rest of your life.

It's easy to condemn people for being realistic about their reaction to such a sum of money. Perhaps your scruples would prevent you from taking a massive payment to leave behind something you've created, but I think it's more likely you're trying to take a moral high ground that's not grounded in reality.

Not condemning anyone for wanting to sell, simply asking why would I choose to use any product this guy makes when he tells me he'd be willing to "delete all user accounts and data and shut down the entire service forever" if that were a condition of sale. How is that in my best interests as a product user?

Lets make it a real life situation: delete all the accounts (in 14 days) and shut down the site forever. Plenty of companies do this.

Do you still feel the same way?

Human nature is weird in a way, we feel better about someone telling us they will note sell a service, even if untrue, than someone coming out and being honest about it.

It is a rational decision by the founder, however grandparent asked from a users perspective. Not only do you have to factor in switching costs but also likely hood of needing to switch.

I think you're missing the question. A billion or multimillion exit for a site operator is not a reason to use that site, which is what GP was asking about.

The examples discussed in the article are in the 1-2 figures $millions range. The Tumblr deal is two orders of magnitude of that.

The article is perfectly justified in asking that question of those acquisitions - I have no idea how much cash the Flickr founders walked off with in the end (after VC and early employees got their shares), but there's a reasonable scenario in which they would have made it much bigger on their own.

Exactly. You have to look at your current income, expected future income, and what you would do after a sale. Could you catch lightning in a bottle again? How long would that take? Would you be OK going back to being just an employee somewhere? It may sound kind of odd, but a low million(s) isn't nescesarily a lot of money if you intent on retiring in a certain lifestyle.

That's were we can see some or most entrepreneurs are not like real artists. (Not saying they should be...)

Take the same choice, but apply it to a musician: I am Universal, I propose to give you a lot of money but I buy your past and future music, and I buy your band name. I'll tell you a lot of nice things: you will be my prefered musician, I'll promote your work everywhere, you'll do concerts, and all that.

But in fact I'll just promote another musician instead, and I bought you only to let more room for this other one.

Don't laugh, that's what happens in the music industry. I have been a sound engineer in a previous life, and saw it with my eyes.

Then, if you are a real musician, you would be nauseated and will regret taking the money, because what you really care about is making music and having people listening to your work.

It is not a dissimilar as one could think. If a software is considered by its maker as a work of love, art and craftmanship, then the said maker should consider it twice before selling it to a big company: it is likely, very likely indeed, that this piece of work will just be diluted, butchered, or simply forgotten in a dark corner, without you being able to do anything about it.

The money is power, it is the power of those who have the most of it, and I think it is very naive to think big corporations can be easily fooled into some transaction that is not in their own interest.

I do not say that Tumblr or whatnot should be understood as works that should be protected against the big fish, but other projects are: If Google bought Firefox, if Linus sold Linux or git to MicroSoft, if Ubuntu became a subdivision of Amazon, then I think there would more at stakes than only money, not matter how high the pile.

Well in both cases you have to look at the relative options. I would assume at this point the Tumblr founders have taken some money off the table (though perhaps not) or at least could in another big round of financing. Money has diminishing marginal utility. A few hundred million is a lot of money, but if you've already taken 10 or 20 or 50 off the table, is it life-changing anymore?

Tumblr is the sort of success that could probably not be replicated. How many people have founded more than one company that does that well?

So I think there's a valid argument that the extra money is not worth the risk of no longer getting to work on such a huge project. I'm sure the founders thought about that. I certainly couldn't criticize them for either decision.

What Would Elon (Musk) Do? That's your answer to the options that having large amounts of cash provides. He can literally go to the Moon, or Mars, seeded by the cash he got from eBay and Zip2

Perhaps the point is that it shouldn't be such an easy decision for you, and that if it is you're probably not as passionate about your startup as you should be. To me, it sounds like you're passionate about money. That doesn't make you insane, but it might make your startup less likely to succeed.

Pretty much the same as, "everyone has their price," right? Not everyone does, though, and I'd even venture that 37S has had purchase/buyout/merger interest along the way.

Though following that logic, these companies could have just not offered the right price. Assuming that people are unwilling to sell at any price because they haven't sold yet is a bit of a fallacy.

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