The 'We Need To Own' Baloney | Hacker News Reader

The 'We Need To Own' Baloney

avc.com

57 pointscwan10 comments

When he said that his firm owns less than 10% of a company and it will probably end up as the biggest payoff in his portfolio, I assumed he was talking about Twitter. But in the comments, he rules that out by saying "We own more than that of Twitter". Interesting. Maybe it is Etsy? Any other guesses?

He also says "I am calling bullshit on it and will do it to your face." Wow, really laying it down there.

del.icio.us, I would guess. Nobody know yet if Twitter is ever going to make a penny :)

Del.icio.us was already an exit for them. (Acquired by Yahoo).

No. Delicious exited too early to be a great exit for USV.

Probably zynga.

My guess is Zynga. At first it was Etsy, but Zynga is already raking in the revenue BIG time and could go public soon. Etsy seems to be doing very well, but Zynga seems a more surefire bet. They were also in early on Etsy and the deal terms were most likely more lucrative for USV. Zynga though had Mark Pincus involved, good amount of other investors,etc, so I could see a 10% stake.

yeah, i probably am gonna regret that. i wrote the post on my blackberry on the eliptical trainer at the gym and i was sweating hard when i got to that point. probably too much adrenaline.

Memorable quote: "The VC business is not about grabbing the largest slice of the pie. It is about getting involved with very big pies."

Yes it is, but if we learned one thing about people in finance, it is that they generally want to have the largest slice of the biggest pie coming from the tallest apple tree standing on the largest orchard...

I know confusing 'my equity value' with 'my sized slice of the pie' is very common among business owners (obviously not as much clearer among VCs as I would have expected).

If you're new to business, it's important to understand the difference between wanting "a business (pie) worth $xM" and wanting "to own (slice) $xM of a business". Especially when it comes to external support or funding, a smaller slice of a bigger business pie often comes as a revelation to people who had previously only thought about the pie.

Also recommend pg's article on the equity equation - http://www.paulgraham.com/equity.html

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