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Comment by danieltillett | Hacker News Reader

The most interesting thing about all these massive fund raisings is why. It is almost as if the managers of these companies think we are about to enter a period where raising funds will be impossible, revenue from servicing the startup economy will dry up, and they will need a massive war chest to survive.

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revenue from servicing the startup economy will dry up

One of the salient differences between the 90s tech bubble and our current state of affairs is that in the 90s Yahoo sold to startups justifying a higher valuation for Yahoo justifying more startups... and this largely doesn't happen now.

I haven't worked with Github but I have worked with many companies which are "strikingly similar" to Github. Their median customer is a boring business which sells things to people for money. If the entire Bay Area slid into the sea, most software companies wouldn't notice until their pull requests stopped getting accepted.

I know SV is the center of the current tech boom, but one of the things this time around is the startup economy is much larger and more wide spread. There seems to be many more startups outside of the traditional centers which is good.

While I agree with you that things are different this time, I still suspect that there is a fair bit of growth acceleration coming from startup dollars being recycled back through the startup economy.

If you build a machine that reliably turns $1.00 into $1.10, your next moves are (a) try to turn the next dollar into $1.15 and (b) find as many new dollars as you can to feed the machine.

Why not just loop the dollar through and live comfortably on the surplus?

More money > less money?

Don't look at me. We didn't raise VC either. Nor will we, until I take off this "WWMCD" bracelet.

I'm pretty sure he'd go to Antarctica.

Starfighter should take funding, open up a local antarctic branch and hire Maciej as the office manager.

Because looping $250m through gives you a lot more surplus to live off of. If we're talking in terms of investment/compound interest, a larger principal is obviously desirable

This is assuming that there is no such thing as market saturation or diminishing returns :)

Sometimes fundraising is to get cash to founders, early investors.

mmm - insiders trying to get out is never a good sign.

Well, it happens all the time, so obviously lots of investors, VCs and founders disagree with you.

I can be a very bad sign, under certain conditions, sure. It's not meaningful all by itself, though.

People wanting to rebalance their portfolio isn't really a warning. Someone selling out completely perhaps is; but people need money for things.

Why wait to find out, when there is money on the table right now?

Also, sometimes they have to take a lot of money, as later-stage investors want to control a sizable chunk of the company (in this case, 12.5%).

Well I don’t think any company has to take any money, but I agree that it might not be a decision the founders have any control over (board level decision).

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