This isn't sustainable financing -- it's growth financing that they will eventually need profitability to make good on the investment (or drive them into the ground). I also use 1password at work and home, and I'd rather they figure out how to operate profitably without the VC-necessitated hypergrowth.

What about being profitable? If you need 620M to keep the company alive what will happen next time?

Yeah, I'm much more worried about their future now than I was 5 years ago. Having to justify a $6B valuation for a password manager means making risky moves into new markets that may not pan out. If things don't go well, AgileBits will be sold for parts. Perhaps to the same kinds of vultures who own LastPass and TravisCI.

Fire all developers and rest on your laurels for many, many years?

But of course they can’t do that because VC, right?

It's not enough to be profitable (which they claimed to be in 2021). But even if they are profitable, it's unlikely they generate a lot of cash. For a secure future you also want a nice pot of cash to be able to make investments and to weather dips in the market.

1Password is like 15 or 16 years old at this point, right? The fact that they still need "financial backing" after all that time is extra alarming, IMO. They have raised nearly $1B in VC money!

This has come with all the expected side effects. No local vaults, electron apps, forced subscription payments, etc etc. More VC money makes for a worse customer experience, almost universally.

> How is this really different from going public?

Venture Capitalists are not like the general public. People trading public stocks value fundamentals - a good product that generates _profit_, _steady_ growth, etc. VCs want cancerous, explosive growth and are willing to take the risk that the pursuit of cancerous growth kills the company.

People who own public shares value return on investment, which in today's market is only loosely couple with fundamentals in many cases. It's hard to explain the value of a lot of public tech companies any other way. Rivian (RIVN) is exhibit A.

yikes, this is a terrible take - $620m of capital means they are expected to become enormous and make huge returns, or go bust trying.

Not necessarily. Let's say you want to build aggressively to $1B revenues with a $1B annual run rate. Let's further say you pretty much keep expenses and revenue directly in line, so you don't lose money but you don't gain either while building. So, your cash reserves remain the same. As your revenue grows, the cushion you have to deal with a market downturn or seize unexpected opportunities declines. Having a cash cushion up front solves this problem.

I don't have any special insight into 1Password's strategy. But I run a company that is essentially bootstrapped and what I described is exactly how we think of cash reserves. In the bootstrapped case, there's a basic math problem that to maintain a constant runway while growing rapidly you must be cash flow positive by an increasing percentage as time goes on. Perhaps 1Password is just looking to protect a long runway that will get them to IPO.