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Comment by nostrademons | Hacker News Reader

The article says they made $1000 on their first day. And they've been around for 5 years (pretty sure the article has the timing wrong, I was putting stuff on GitHub in 2008) without taking any funding, which is pretty hard if you're not profitable.

My guess: they're gearing up for an IPO. Maybe not for a couple years, but they see their market size as being big enough to go public, and they want a prominent financial backer in their corner when they do. That's the usual reason why profitable companies take investment. Microsoft famously eschewed all venture funding until a mezzanine round right before they went public, which was a.) so they could vet their investment bank and develop a relationship with them before it really mattered and b.) so said investment bank would have an incentive to hype up the stock and get the highest possible price at IPO time.

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The amount of dilution the current shareholders will have to swallow for $100M in investment is an extremely high price to pay to get into bed with an investment bank.

> pretty sure the article has the timing wrong

I think they mean "been around for 4 years before taking funding last July" which would equate to 5 years.

This shows investment banks are scum: http://blogs.reuters.com/felix-salmon/2013/03/11/where-banks...

That is awesome and disgusting. On a tangent, it reminds me of the 'US Govt making money from federal reserve profits' talking point. Yeah sure, just as one would gain reward points by growing a credit card balance... you're not the one making the real profit (Goldman Sachs).

Investment banks are scum. They do basically nothing themselves and eat millions in profit. Simply because of their position and nothing else.

Having money is a valuable service to offer. It's why we have interest rates.

Interest rates is why there is always more debt in the system than money, and why capitalism as a whole can be more likened to cancer than anything else. But don't take my word for it, wait until the host dies.

Show me a smart person disagreeing with actual arguments, and in the meantime know that even a million zeroes add up to exactly zero.

only true if money they had actually represents real work that somebody created then transferred as money to them.

The current status quo is that a bank creates money out of thin air, which they can then profit off. This money they create _might_ represent value, but only after the loanee does some work for the debt. Therefore, all interest payment on such created money are essentially a "tax" the banks leeches off the people who did the real work.

Money is simply a manipulation of language backed up by force. The paper coerces sharing (whether fairly or unfairly) of resources (whether labor or physical resources like trees and oil) in a way that does not spontaneously happen without the paper.

A simple example would be without money you barter which is also a manipulation of language expressed through physical items. You need this I need that so we exchange. With money the equation becomes you need something, and you can buy it with money, here is some money, now give me what I want. The intermediary form of this was gold, because people can agree that gold is reliable. We replace that with simple language backed up by force, a dollar. A piece of paper that initially will stand in for gold to establish its value, but eventually will stand in for itself. Eventually we replace this with something like Bitcoin, no coercion simply an agreement in language justified through a market.

Quid pro quo.

Correct, but that's been the case for a very long time. Banknotes and fractional reserve lending have been around the block many times, even under a 'gold standard'. It's a banker's world; we just live in it.

"Gold is money. Everything else is credit". - J.P. Morgan

Anyone with money would suffice (and pretty much anyone would be willing to provide the service for a song considering there is no risk to them even if they mess up, FB anyone) when floating a stock. Instead banks get to do their retarded song and dance that no one needs or wants and they collect millions for that which enriches their managers for nothing.

Investment banks are salesmen with some lawyers attached. I'll leave it to you to decide how this should affect your assessment...

Investment banking is relationships. just like all business. Their role in the housing crisis is despicable. Their role in an IPO is pretty important

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