Re:Facebook Shouldn’t Be Allowed to Buy Tbh
by onion2k on Thursday October 26, 2017 @02:02AM
(#15556730)
the only way to get a piece of the capital is by planning your exit strategy
VCs have always needed founders to have an exit in mind, but 20 years ago it just wasn't vocalised. There was never a time when VCs would put money in to a business that didn't have a clear way for them to get their money+profit out again. The dot.com bubble made everyone believe an IPO was the obvious way to cash out. When that bubble popped most founders started to see the exit as acquisition. That's all.
To be honest, the startup scene has changed a great deal over the past few years. When I did my first startup you could raise a seed round with nothing more than an idea; I got in to an accelerator before we'd even spoken to a potential customer let alone made an actual sale. Now you're unlikely to get very far with investors until you've proved the idea and got some significant traction. The level of risk people are willing to accept is really low. It's a shame, but it's quite understandable.
VCs have always needed founders to have an exit in mind, but 20 years ago it just wasn't vocalised. There was never a time when VCs would put money in to a business that didn't have a clear way for them to get their money+profit out again. The dot.com bubble made everyone believe an IPO was the obvious way to cash out. When that bubble popped most founders started to see the exit as acquisition. That's all.
To be honest, the startup scene has changed a great deal over the past few years. When I did my first startup you could raise a seed round with nothing more than an idea; I got in to an accelerator before we'd even spoken to a potential customer let alone made an actual sale. Now you're unlikely to get very far with investors until you've proved the idea and got some significant traction. The level of risk people are willing to accept is really low. It's a shame, but it's quite understandable.