Many of these startups spend like drunken sailors since the venture capitalist money is freeflowing. Lavish food spreads, private jet flights, exorbitant salaries and compensation for still unprofitable companies. Forgive me if I don’t feel sorry that they “can’t make payroll” this week. Same sob story we hear when Democrats bring up Republicans trying to hurt poor grandma or single mothers when a government shutdown is looming. Of course, we all know they WILL be bailed out, because it’s Silicon Valley and leftist’s largest contributors.
Only imbecilic incompetent startups would do this. The more VC money you take in, the more you dilute the worth of your OWN employee shares in your startup. I've never seen it.
Lavish food spreads,
There is food, to be sure. It's a cheap way of getting engineers to work morning, noon, and night on projects critical to getting the company to revenue.
private jet flights, exorbitant salaries and compensation
You have to attract superstars that not only can hit the ground sprinting, but also attract other great talent. That takes larger salary and compensation - FOR THE SUPERSTARS. Without the superstars, you have no breakout product, or can't execute to bring it to market.
But "regular", hard-working execution engineers are also hired - usually at a lower than normal salary, with stock options as enticements - they take the risk that the long hours and lower salary will pay off via IPO or company purchase.
for still unprofitable companies.
Yes, they're startups. It's an amazing horrible fight to get to revenue at all, let alone profitability. That's why VC and Angel investors exist.
Forgive me if I don’t feel sorry that they “can’t make payroll” this week.
So the ability of regular people to get the paychecks they were promised, so they can pay their mortgage and other bills, is beyond your empathy. Nice.
Just curious - what abacus are you browsing FR on?
-Yossarian
(Silicon Valley Survivor)
You clearly don’t have a clue. I am the CEO of a company that has had successful 25 year relationship with SVB. We’re not a start up but a strong company with 75 employees who will need paychecks this week. How does a company handle a $250k limit. Occasionally a customer will pay their invoice, sometimes well over a million and it sits on our SVB account until we use it to buy more inventory or pay the rent on our warehouse our pay or employees or their health insurance. There been no lavish spending or free food on my watch and yet you think you know the reality. Perhaps you’ll make one of my employees mortgage or truck payments on Friday. Or how about some groceries? It is easy to mature sweeping comments based on ignorance when you’ve got nothing on the line. I’m spending the weekend with my management team trying to figure out how to keep the company alive.