boecher.de

It’s my comment of the day, found at a Silicon Alley Insider article named “Hey, Look What Tumblr’s Done With All Its Money”. I have smirked reading this comment from Nicholas Carlson in response to “Anthony”. It reflects the stories I’ve heard from a bunch of start-ups of known identity, and honestly it seems to be often the way it goes.

The VCs told not to worry about revenue right now – a startup with revenues doesn’t need VCs – and here’s a refresher on what a VC would prefer founders do:

• The Start-up ignores revenue.
• The Start-up is running out of cash.
• They ask a VC for cash in exchange for large handfuls of equity.The VC agree.
• Than founders ignore revenue more, again. Run out of cash, again.
• Shovel equity in VC’s direction, asking for more cash, again.
• Optional: repeat steps 1 through 5.
• The founders have to accept VC-picked board members.
• The Start-up stops ignoring revenue.
• The Start-up will be sell to other VC’s or at the friends at Google.
• Next Start-up is ringing the bell. Let’s start again at step 3.

It covers in some cases my assumption and personal observations, but hey! I guess it’s the normal reality and the way the cookie crumbles.