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> So, when growth slows or stops, feel free to freak out.

Or you could just save yourself the mental angst and build a profitable, sustainable business that doesn't require perpetual growth to keep the wheels from falling off.




"Sustainable" is a very trendy word these days, but the harsh reality is that in most cases it's not up to you. If your business is profitable it will usually attract competitors, and if they are growing and you are not, you will eventually be crowded out. Wal-mart vs. Mom-n-Pop's General Store, in the extreme case.


Most millionaires in this country are self-employed/small business owners, not VC-backed tech startup founders or early [insert unicorn name] employees.

Silicon Valley has convinced many people (you included apparently) that it's virtually impossible to build a business with meaningful and sustainable profits simply because there are competitors or other forces that limit growth and market size. This is simply not true.

Hint: you don't need to own every mobile home park in America to be a millionaire several times over.


Consider the source. a16z has a vested interest in there being more startup founders who don't consider/believe this obvious fact.


If you exit as a $10 billion unicorn, does it matter if the wheels fall off immediately after?


Aren’t these called decacorns these days :)

It only matters if you have any morality since selling a company to investors for $10 billion when you know the wheels are about to fall off is not exactly the right thing to do.


This is capitalism. As people like to say, you're "obliged" to get the best deal for your current shareholders.

As long as you don't lie or omit required information, you're not required to point out that a particular growth metric is slowing down, and can point to a different one.

(and as one of the other comments has pointed out, quite often the acquirer will shut down the acquired)


I don't assume that you know the wheels are about to fall off, only that it doesn't matter to any decisions made prior to the exit.

Assuming a voluntary transaction, it is incumbent upon the investors to perform any due diligence they feel they are entitled to.


I would hope as a CEO you would know of something major like the wheels falling off immediately after you exit. If the event was truly unknowable before you exited then you are morally fine, but to knowing exit when you know there are serious issues is not fine.


One would hope.

As long as everything is fully disclosed, an investor may purchase without recourse.

For example, M. Cuban achieved a $1 billion valuation of a company on $3.1 million in revenue and $2.7 million in net losses. This was transformed into a $5.7 billion exit months later. Yahoo's market cap was then chopped down by about 80% over the next few years.


There is still a moral duty of care towards non-sophisticated investors. You can make an argument that an investor that buys a company knowing all the risks and who is able to rationally evaluate the risk is responsible for their actions, but many investors are not able to determine the risks involved.


An investor who cannot determine risks is not really an investor. More of a cash supply.


Why would a unicorn have wheels? I am so confused


Obviously, that's the disruptive feature that makes it worth $10 billion.


Its hind legs have been amputated.




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