Startups with tens of millions invested
- Thread starter jon_xx_x
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Troshi
Supreme Member
- Aug 19, 2011
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- 227
Still seems like a lot for "tens of millions"
SahL
Elite Member
- Jan 8, 2011
- 1,592
- 1,311
mrtwister_65
Regular Member
- Dec 30, 2009
- 461
- 542
Many businesses to become self-sufficient have to survive 1,5 years statistically, read somewhere. So if you add all the payroll for 1,5 years and all the promotion, office costs, promo actions, launches, celebrity endorsements - all that adds up.
- May 19, 2009
- 1,295
- 7,760
I had to do two business plans this year for college classes -
1) As was mentioned - you look for 1.5 - 2 years of capital to open your doors. One of the leading causes of biz failure is insufficient capital
2) If you're product or service needs people; people are VERY expensive! Add up salary plus benefits plus taxes and then multiply it by the number of people... yea... not cheap.
3) Infrastructure isn't cheap either - building(s) or even space rental - equipment... it all adds up.
1) As was mentioned - you look for 1.5 - 2 years of capital to open your doors. One of the leading causes of biz failure is insufficient capital
2) If you're product or service needs people; people are VERY expensive! Add up salary plus benefits plus taxes and then multiply it by the number of people... yea... not cheap.
3) Infrastructure isn't cheap either - building(s) or even space rental - equipment... it all adds up.
apoorv
Regular Member
- Aug 31, 2011
- 301
- 62
Mostly building the technology - if it's a technology company primarily. See this answer on Quora: http://www.quora.com/Quora-company/...th-the-50-million-in-funding-it-just-received
They received $50 million in funding and the answer is the owner's version of what they want to achieve. I don't personally see the need for anything beyond $5-6 million for a software/technology company in the short term (an year or so) but the VCs obviously think otherwise. Tons of companies are getting insane funding nowadays.
Personally, I like what YCombinator does. I think that's a much better model.
I also like what Dustin posted here: http://dcurt.is/quoras-50-million. Again, don't see the point of $50mil for Quora.
They received $50 million in funding and the answer is the owner's version of what they want to achieve. I don't personally see the need for anything beyond $5-6 million for a software/technology company in the short term (an year or so) but the VCs obviously think otherwise. Tons of companies are getting insane funding nowadays.
Personally, I like what YCombinator does. I think that's a much better model.
I also like what Dustin posted here: http://dcurt.is/quoras-50-million. Again, don't see the point of $50mil for Quora.
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Halilovic-Squad
Regular Member
- Mar 25, 2010
- 246
- 130
to make money takes money...
...you might have heard it often in your live - and it`s like that.
of course you can start a buisness with a small initial investment and start it off, trying to grow it organically.
but if you want to go big you will have to invest big.
...you might have heard it often in your live - and it`s like that.
of course you can start a buisness with a small initial investment and start it off, trying to grow it organically.
but if you want to go big you will have to invest big.
OiOiOi
Regular Member
- May 13, 2011
- 203
- 120
because there is a tech bubble.
Most, but not all, start ups shouldn't need that much money to be profitable.
VC's are out of their mind with giving money to businesses that are never going to make a dime.
Look at instagram being purchased for a fucking billion dollars with 0 revenue. Facebook's recent IPO and collapse is evidence of this.
It's a bubble, it's not like tech magically defies the rules of profitability.
Most, but not all, start ups shouldn't need that much money to be profitable.
VC's are out of their mind with giving money to businesses that are never going to make a dime.
Look at instagram being purchased for a fucking billion dollars with 0 revenue. Facebook's recent IPO and collapse is evidence of this.
It's a bubble, it's not like tech magically defies the rules of profitability.
wokaka
Senior Member
- Apr 1, 2010
- 997
- 269
im more interested in how they spend the money in marketing. Nobody ever talked about this in details..
do they use the money to bribe the tech media to talk about them?
do they use the money to sponsor tech events?
do they use the money to create "buzz" like in facebook?
do they use adwords and facebook ads etc.?
do they sponsor local offline media?
this kind of stuff u know
because some companies can all of sudden get all the spotlights. Rage of Bahamut (DeNa's game) in android and iOS all of sudden becomes top app. If they didnt start big, definitely it wouldnt be this popular. and obviously casual users won't download the game if it wasnt popular. so how did they get from zero to 100,000 downloads? (before it finally went viral)
do they use the money to bribe the tech media to talk about them?
do they use the money to sponsor tech events?
do they use the money to create "buzz" like in facebook?
do they use adwords and facebook ads etc.?
do they sponsor local offline media?
this kind of stuff u know
because some companies can all of sudden get all the spotlights. Rage of Bahamut (DeNa's game) in android and iOS all of sudden becomes top app. If they didnt start big, definitely it wouldnt be this popular. and obviously casual users won't download the game if it wasnt popular. so how did they get from zero to 100,000 downloads? (before it finally went viral)
If you were to purchase a storefront on times square in NYC, would it really concern you if the previous business in that location had been making any money?
Regardless of whether or not instagram has been monetized, it is an incredibly valuable asset.
Having worked for a startup that raised a few million I can tell you it goes like this..
VC's put their guys on the board of directors.. these directors fly around the world 1st class/5star going to "important meetings" or in other words all expenses paid holidays on the company that basically produce nothing.
VC's and directors then insist you need a "proper CEO" and set out to find one for you.. proper CEO demands a salary of $500k/year (plus expenses of course).
Fatcat useless but "proper" CEO now installed within company decides to hire a support staff to make him seem like he's managing a proper big company instead of a scrappy little startup. So he hires his mates - Human Resources Manager first.. then a secretary to open the CEO's 2 letters per day and make him coffee.. then an accountant, even though the company accounts are already managed by one of the biggest accounting firms in the world.. and on it goes.
Useless support staff to support useless CEO having been hired, he now decides he needs a bigger more prestigious office to house them all (not to mention his ego) so off he goes and rents some huge swanky office space and of course lots of expensive but rather comfortable office chairs to cushion their corpulent behinds.
Now soon after all this hiring and jetsetting and pointless spending has taken place, the accountant hired by the CEO gives him some worrying news.. CEO then calls everyone for an important meeting (he's fond of having us all wasting time in meetings) and gives us the bad news.. they've run out of money, company is closing at the end of the month and we're all fired. Useless CEO moves onto his next victim.
Such is the lifecycle of a VC funded startup.. happy days!
VC's put their guys on the board of directors.. these directors fly around the world 1st class/5star going to "important meetings" or in other words all expenses paid holidays on the company that basically produce nothing.
VC's and directors then insist you need a "proper CEO" and set out to find one for you.. proper CEO demands a salary of $500k/year (plus expenses of course).
Fatcat useless but "proper" CEO now installed within company decides to hire a support staff to make him seem like he's managing a proper big company instead of a scrappy little startup. So he hires his mates - Human Resources Manager first.. then a secretary to open the CEO's 2 letters per day and make him coffee.. then an accountant, even though the company accounts are already managed by one of the biggest accounting firms in the world.. and on it goes.
Useless support staff to support useless CEO having been hired, he now decides he needs a bigger more prestigious office to house them all (not to mention his ego) so off he goes and rents some huge swanky office space and of course lots of expensive but rather comfortable office chairs to cushion their corpulent behinds.
Now soon after all this hiring and jetsetting and pointless spending has taken place, the accountant hired by the CEO gives him some worrying news.. CEO then calls everyone for an important meeting (he's fond of having us all wasting time in meetings) and gives us the bad news.. they've run out of money, company is closing at the end of the month and we're all fired. Useless CEO moves onto his next victim.
Such is the lifecycle of a VC funded startup.. happy days!
Troshi
Supreme Member
- Aug 19, 2011
- 1,231
- 227
Having worked for a startup that raised a few million I can tell you it goes like this..
VC's put their guys on the board of directors.. these directors fly around the world 1st class/5star going to "important meetings" or in other words all expenses paid holidays on the company that basically produce nothing.
VC's and directors then insist you need a "proper CEO" and set out to find one for you.. proper CEO demands a salary of $500k/year (plus expenses of course).
Fatcat useless but "proper" CEO now installed within company decides to hire a support staff to make him seem like he's managing a proper big company instead of a scrappy little startup. So he hires his mates - Human Resources Manager first.. then a secretary to open the CEO's 2 letters per day and make him coffee.. then an accountant, even though the company accounts are already managed by one of the biggest accounting firms in the world.. and on it goes.
Useless support staff to support useless CEO having been hired, he now decides he needs a bigger more prestigious office to house them all (not to mention his ego) so off he goes and rents some huge swanky office space and of course lots of expensive but rather comfortable office chairs to cushion their corpulent behinds.
Now soon after all this hiring and jetsetting and pointless spending has taken place, the accountant hired by the CEO gives him some worrying news.. CEO then calls everyone for an important meeting (he's fond of having us all wasting time in meetings) and gives us the bad news.. they've run out of money, company is closing at the end of the month and we're all fired. Useless CEO moves onto his next victim.
Such is the lifecycle of a VC funded startup.. happy days!
So how do I go about becoming one of these crappy CEOs? Sounds like my dream job
followinstagram
Newbie
- Aug 6, 2012
- 13
- 0
starting from Coding to Marketing, and for the management of large no of users(servers and other stuff). The budgeting was probably taking into consideration of increasing no of users. Seems like there prediction was awesome and they got more no of users since launch.