winterchil

You're not wrong but it depends on the platform and campaign. If the ads are bought click-optimized then yes... if conversion optimized then the algorithms will learn to avoid zealous clickers.

There's a dated but entertaining dramatization of this failure from the movie Pentagon Wars: https://youtu.be/aXQ2lO3ieBA.

he means he shorts the stock market... although it can be difficult to get the borrow when everything is tanking.

Tesla is huge in Norway because of a number of large tax advantages from income tax deductions, to free registration, etc.

That being said, they obviously wouldn't sell if they didn't work but I wouldn't look at the popularity there as endorsement of cold weather performance, other factors are at play.

I understand the product-fit, but what incremental value does Etsy bring to either of those companies?

What hasn't been mentioned yet is that employees hold Common Stock, whereas the investors generally hold preferred stock. The preferred stock is worth more than the common stock because of special protections/provisions/voting rights/etc.

It's perfectly reasonable that the price would be lower on a buyback program. On the other hand controlling the equity is pretty important and it's not surprising they won't let it go to open market.

Welcome to the wonderful world of being a minority shareholder.

top class negotiating skills exhibited by the sellers

Certainly a nice premium but not clear if this is a result of negotiating prowess or necessity given the large fractured institutional holdings. 30% is a pretty typical change of control premium for public companies and until the offer OPEN was under its 90 and 120-day moving averages.

Sounds like you got in at just the right time, congratulations!

This totally explains why everyone is moving to Oakland but, as you say, not a fair comparison.

Out of curiosity, how much would you estimate it costs to buy the house? Some quick math will let us figure out the rent vs. buy for your neighborhood.

You're welcome to call bullshit but it's not and here's why.

First $6k/month will not get you a $1.5MM home unless you had a down payment of $500k and even then it would not cover your taxes and other expenses. A general rule of thumb for someone with good credit is a monthly payment of $3k will let you borrow $500k on a 30-year fixed mortgage. You can check this yourself here: http://www.mortgagecalculator.org/ (or use Trulia's).

The problem with Trulia's "really cool tool" is unless you use the advanced version all the inputs are wrong. For example, its tax assumptions are less than half of real cost for SF. A more sophisticated tool is available from the NY Times (http://www.nytimes.com/interactive/business/buy-rent-calcula...).

Of course getting an apples to apples comparison is pretty hard unless you're talking about buying a condo vs. renting a condo in the same building. Yes, it would be cheaper to buy a 1 bedroom in Bayview then rent a 3 bedroom in Pacific Heights. If you're looking at starter homes in a decent area, say, Noe Valley and compare those costs to renting something similar in the same area renting is generally cheaper.

The "excess for investing" DOES exist, at a minimum in the form of the down payment you did not spend. The good news for home buyers is that you get leverage on that return if the market keeps going up. The bad news is that it's illiquid and we don't know whether that's a better investment than the stock market or one of the companies we see on the front page everyday. In short, if you're never moving again buying is likely cheaper. Otherwise, it's complicated.

TLDR: It's complicated, and most calculations downplay other buyer costs and ignore other renter opportunities.

If you're buying something comparable it's not $3k/month, it's $5k/month + $900/month in property taxes + all maintenance and expenses + the lost opportunity cost of investing all that money in diversified assets.

It's disgusting that this is necessary but it's a fight we have to win.

Very sorry to see them go and it was a beautiful product. However, this is no surprise at all. More surprising is that they were able to raise money for a business model that is fundamentally unsustainable (negative gross margins).

I think there's a glitch with their pie charts. They have no founders for any region making a salary in the 125k-175k bucket. Possible, but unlikely.

The number that return <1x is significant too. Out of 10 investments typically you'll have 1 big hit, 2-3 decent returns (2-5x on investment) and a bunch of "failures" which would be anything less than 1x.

Depending on the VC it's possible anything less than 3x is considered a failure because of the opportunity cost and their inability to re-invest proceeds.

Seems more likely that Yahoo is preparing to take a write-down on a collection of assets and is trying to mitigate the total amount by auctioning off the leftovers.

Yes, we got 7 views spread over 5 days that were probably all from YC reviewers (embedded player). They watched an average of just over 1 minute of the video which was just under 2 minutes long. We were not invited to the interview.

There was some very cool discussion at the end of the video and I'm guessing none of them saw it. Elsewhere in this thread is the speculation that high views = application that was on the fence and I guess I take comfort in that.

Anyway, if we were to apply in the future I'd ensure we had a shorter video. On the other hand, we were highly unusual candidates so it's possible we were just a bad match.

> The safe thing to do when biking on sidewalks is to dismount as you arrive at an intersection

I think this is also the legally required thing to do in most jurisdictions.

Not if the price ceiling were selectively enforced against only one type of radio station. In your analogy this would be the e-commerce company has to buy twinkies from their supplier at 8x the price everyone else pays by government mandate.

They make more from Pandora than they ever did from radio... and their music accesses a larger audience.

This would absolutely not make the IRS happy.

Not exactly sure how to take your comment but Pandora is a public company, the IPO was an "exit" in the valley's sense. Maybe that's what you meant? LastFM was probably the other great example.

It depends on your criteria. Many people on here like to discuss sustainable businesses. Being acquired prior to reaching profitability is obviously a huge hit for the entrepreneurs, but it's irrelevant to the other conversation.

Absolutely. And the distinction between "growth equity" and "private equity" gets ever more blurry over time.

This is a brutal generalization so take it with some salt. I also don't subscribe to the "all PE guys are evil and unnecessary" philosophy but with just this teaser description it would be easy to think I support it. Anyway, on to your answer.

Private Equity firms typically want to run their portfolio companies as profitably as possible. This means cutting down service, R&D, technology, etc as lean as possible without damaging the existing product or brand.

It also rules out lots of room for innovation as the companies chief reason for existing becomes generating enough profits to pay off the individual company's outstanding debt.

Why is there debt? Private Equity firms will buy a company, streamline its operations, increase its profits, and demonstrate to banks/investors that it is financially stable. Once they've done that they raise lots of debt against the promise to pay off that debt with the future, dramatically increased, profits. They use the debt to pay themselves a bonus for taking over the company and fixing it.

Why not wait and just pocket the company's profits over time? Well, that's how Warren Buffet does it (sort of), but by loading the company with debt they get their bonus sooner increasing the IRR for their own investors.

edit: phrasing.

The founders think the company is valuable, they're usually on the board and have both a fiduciary and, hopefully, personal sense of duty to their company.

This is a tired sentiment in the valley. There seems to be a power/control needle that swings back and forth between the business people and the technical people. The truth is you desperately need both.

While we're all familiar with the "I just need a coder..." stories, there are at least as many coders working on projects that have zero business prospects. At the moment this is actually the greater sin as technical talents are in shorter supply so dedicating your (limited) resources to an idea with no long-term prospects is basically shooting yourself, and the valley, in the foot. You'd be much better off partnering with a business co-founder and raising money.

On the other hand, Silicon Valley has a long history of exploiting engineers and we're all right to be incredulous when working for limited equity and no salary.

There's actually a good reason that you get credit for a long time and that is successes are so rare and valuable that you deserve credit for a long time.

The vast majority of these silicon-valley companies are built with investors' money (typically from Venture Capital firms). The VC business model generates outsized returns on a few successful companies which pay for all the failures. Careers and entire funds can swing to success based on the outcome of one company so if you're a founder you deserve that credit. It also means you've returned tons of extra money to investors that pays for all your subsequent losses.

Kevin Rose specifically is an interesting case because Digg was not a success for his investors, but her personally did well.

For what it's worth "sign-up and see" is an awful response to a potential user being confused about what your service does.

I think you should consider changing your landing page to make it explicit how you can help local businesses. That may mean removing some of the myriad of use cases you describe.

My $0.02, obviously feel free to ignore.

Sounds like the transition to the corp is the root of the problem. Realistically there are very few restrictions on how to do this and it's SOP for non-contributing minority owners to get seriously diluted.

Harsh but fair: this is as it should be. Ownership based on work/effort/invention rather than invested capital is contingent on that work continuing for a LONG period. Generally these arrangements have a cliff also - so if you leave in less than 12 months your ownership is drumrole nothing. This isn't true only with startups - look at inventors in other businesses... in exchange for an idea and sample they get 1% of the royalties, it's small because sales & marketing & production are more important than the invention

It's entirely possible you have a case, but your description sounds like the prototypical ex-founder nightmare. Based on pattern-matching, you may get some cash, but nowhere near what you're saying you're entitled to have.

There's a risk though, if you have any entrepreneurial aspirations you'll burn all your future potential with the lawsuit. VCs and potential co-founders will be very wary of dealing with someone who has taken this route.