Re:Fuck the VCs (or not fuck the VCs)
by mechanical_fish on Thursday August 28, 2008 @05:58PM
(#289531)
it's not at all clear what Greenspun really wanted VC money for in his cash-generative services company
Read his new, improved, more nuanced explanation in Founders at Work.
If I were to summarize his answer: It requires intestinal fortitude to embrace slow, organic growth at the cost of turning down lots and lots of business from a market that is begging for your services. But it is also hard to recruit people to grow your company -- especially businesspeople -- in a bubble economy where every company with a domain name is going public with billion-dollar valuations. So ArsDigita tried to come up with a plan to go public, and that inevitably involved VCs, because back then investment banks didn't bother talking to privately funded companies, because the fix was in: Why bother working with actual, profitable companies when you can make more money by scratching a VC's back? It's not like the market was paying attention to fundamentals at the time.
The moral of this story is that bubbles suck. They're completely disorienting: The market value of everything is screwed up, and you're surrounded by irrational people. I do not miss those days at all.
Read his new, improved, more nuanced explanation in Founders at Work.
If I were to summarize his answer: It requires intestinal fortitude to embrace slow, organic growth at the cost of turning down lots and lots of business from a market that is begging for your services. But it is also hard to recruit people to grow your company -- especially businesspeople -- in a bubble economy where every company with a domain name is going public with billion-dollar valuations. So ArsDigita tried to come up with a plan to go public, and that inevitably involved VCs, because back then investment banks didn't bother talking to privately funded companies, because the fix was in: Why bother working with actual, profitable companies when you can make more money by scratching a VC's back? It's not like the market was paying attention to fundamentals at the time.
The moral of this story is that bubbles suck. They're completely disorienting: The market value of everything is screwed up, and you're surrounded by irrational people. I do not miss those days at all.