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Comment by chime | Hacker News Reader

Reading the original post, I thought pretty much the same thing. The whole idea of getting VC money is to jumpstart the next phase of a company/product's life. Facebook was a college kid's side project that looked promising but VC money made it top 3 site on the web. YouTube would have been impossible for 3 typical 20-somethings to afford out of their personal/family savings. They needed VC funding because they were burning through $1m/month in cash. What exactly is it about Stack Overflow that Joel can't pay for himself with his own funds? What kind of hiring does he want to do to make it any bigger?

Joel listed all these vague reasons that sort of sound good without actually saying concrete steps / changes that would come out of VC funding. I would definitely like to hear what it is that he, despite being one of the most popular tech bloggers with a boatload of notoriety and savings, can't do with Stack Overflow that somehow VC money can.

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I used to play high limit poker and it is quite common in the poker world for the best players to "share" themselves in a tournament or, more likely, in a game where the stakes are huge.

Being able to self-fund isn't always reason enough to self-fund. In this case, Joel may want to expand into 10,000 niches, but may worry whether the venture will be profitable. I'm just speculating. If there is VC willing to take some of the risk with him, for an equity share that he accepts and thinks is a good deal, is it still wrong for him to accept it? I don't think so.

They've created a great platform and established no way to make money off it. It is like Twitter in the early days, but like DHH said, it has the disadvantage of being on a thousand different niche websites instead of one aggregate.

One possible way to still make a good return off it is take the Twitter path of getting VC money with the hopes of finding some revenue stream down the road. Maybe they can come up with a similar search deal?

Where do you get the idea that stackoverflow doesn't make money? It appears to make enough money to pay for its own hardware, its bandwidth costs, the salaries of several employees, and more.

StackExchange certainly doesn't make any money, and they've promised their customers that they'll have 45 days warning before they start charging.

Even then, almost none of their SE customers could afford the proposed fees based on their current income.

You confuse StackOverflow (the company with 3 employees and Joel as a founding partner) and StackExchange (a product of Fog Creek based on the SO code). StackExchange's revenue is less important than the revenue from StackOverflow which is currently derived from ads and the careers site.

   It is like Twitter in the early days

It's like Twitter now.

What exactly is it about Stack Overflow that Joel can't pay for himself with his own funds? What kind of hiring does he want to do to make it any bigger?

These are the precise questions that we can't presume to know the answers to. Joel probably has very good answers to these and more questions, and is using them during VC pitches right now. Just because his ideas are not obvious to us doesn't mean he doesn't have something good in mind.

Maybe I'm a cynic, but I wouldn't presume Joel has great answers for these questions. As DHH says in his post, he may just want to capitalize on the service's early success and take some money off the table.

I don't think many VCs let you "take money off the table" in the Series A. It has been done, but it's rare, and it's a sign that a founder doesn't believe in the business prospects that they're asking everybody else to invest in.

I guess you are getting a lot of people throwing your old posts back at you, but...

Why not? You say yourself that the 1 in 20 shot at a lot doesn't usually make sense for an entrepreneur with other options. If you prefer a partial cash while betting big with the other piece, why should this mean you don't "believe in the business prospects that they're asking everybody else to invest in?" It doesn't mean this when anyone else does it.

> It has been done, but it's rare, and it's a sign that a founder doesn't believe in the business prospects that they're asking everybody else to invest in.

Fred Wilson (avc.com) disagrees. He thinks that letting founders take money off the table is a great idea in several circumstances.

You don't want founders looking for/taking an exit too soon.

Fred is one of the many believers in the so-called "secondary" raise, but NOT for Series A.

http://www.avc.com/a_vc/2010/01/the-tug-of-war-between-ma-an...

I found PG's essay on this pretty interesting too: http://paulgraham.com/vcsqueeze.html

Charles H. Ferguson, High Stakes, No Prisoners: A Winner's Tale of Greed and Glory in the Internet Wars (W. W. Norton & Company, 2001).

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