The companies I mentioned are all alike in that they have nearly zero marginal cost of production; zero cost of distribution (they grew virally); early markets that could be reached with a product built only by the founders; and a lack of competition. Together, that means low costs and high profits, which means they didn't need to take much investment (Facebook is an exception, but they took it all on very advantageous terms), which means they had investors begging them to invest rather than them begging investors.
The ones that got diluted did so for different reasons. My understanding of PayPal is that it's because of the number of pivots and corporate restructurings they needed to do before finding product/market fit; they started as 2 separate companies (X.com and Confinity) in 1996, and didn't really take off until 1999. My understanding of Box is that they need a very expensive enterprise sales process to generate revenue - they don't get the viral growth of say Hotmail or even DropBox. Lyft got in a price war with Uber, and spent billions on ride subsidies to generate consumer demand and ensure they were price competitive.
Warren Buffett had over 25% of Berkshire Hathaway after roughly 43 years, until he began liquidating to give it away.
Michael Dell now owns 52% of the publicly traded Dell. That had been reduced to about 14% during the company's last term as a public entity (circa 2013), prior to the move to take it private. Through very clever maneuvering he now majority controls the public conglomerate of Dell + EMC + VMWare.
Another one is Larry Ellison, who still holds 30% of Oracle after 41 years.
How much of the capital raise decision due you feel falls into founder choice vs market or industry dynamics?
I know that I've decided not to fundraise until I have a pretty good idea who my market is and some proof points that they actually want my product, and I've chosen product ideas and target markets to make it feasible (if difficult, sigh) to test those assumptions without funding. Part of this is that I see my personal competitive advantages as technology & strategy, though, and I kinda suck at skills like hype and fundraising. Someone good at hoodwinking people like Elizabeth Holmes or Lucas Duplan might rationally choose to raise as much capital as possible first and then hire people to figure out the details ... but then again, it didn't exactly work out for either of them. (Actually, Steve Jobs and Jeff Bezos are good examples of people for whom this strategy did work out - but they actually were not diluted all that much, because the data they took to investors was such that they were able to raise that capital on advantageous terms.)
Brian Chesky talks in some interviews about how they initially planned to grow AirBnB organically and take only as much capital as needed to stay alive, but foreign competition that copied their idea and raised hundreds of millions forced their hand. At that point it didn't matter much, though, because they already had a profitable business. Joel Spolsky has also written about the decision process:
https://www.joelonsoftware.com/2010/02/14/raising-money-for-...
But many startups run out of cash while still growing. It's more like dying from exhaustion while running faster and faster, not a frequent outcome.
Is it that or is it because a lot of start ups always want to "grow" at all cost? It is be possible to have a small-medium scale business and organically growing it out, but obviously if you take investor money, they want max return in shortest amount of time possible.
$700 x 3 = $2.1B. I guess one of these numbers is wrong.
If it had said "each took home" then your interpretation would have been correct.
By contrast, the 3 GitHub founders each took home about $1.25B from their $7.5B acquisition. Mark Zuckerburg's Facebook stake was worth about $20B in 2011, out of the roughly $85B market cap. Larry & Sergey own 11% of Google today, 15 years after it became a public company. Kevin Systrom netted about $400M from Instagram's $1B sale. The three YouTube founders took home around $700M of YouTube's $1.65B sale. Jan Koum and Brian Acton together took in about $11B of WhatsApp's $19B sale, including continued stock incentives (they may've forfeited some by departing FB early). AFAIK Markus Frind took home nearly all of the $575M that PlentyOfFish sold for.
I was also surprised at how low the founder ownership stakes were for Box (3% IIRC) and PayPal (Elon Musk was the largest founder shareholder at about $85M of the $1.5B purchase price). It really does pay to keep capital requirements low, profits high, and get on the hyper-growth curve before taking lots of capital rather than taking lots of capital so you can get on the hyper-growth curve.