[moorhosj]

Sure it does, venture funding comes with investors seeking to make a large return in a specific timeframe. If they were entirely self-funded, they could slowly ramp revenue streams and build on a sustainable base.

Getting a large influx of funding forces a company to search for faster growth to justify the valuation and deliver projected future growth. In 2017, Medium laid-off 1/3 of their workforce because their advertising model wasn't working [1]. The implication is that they hired a bunch of people to sell something that nobody wanted. A self-funded company, would have likely never hired those people in the first place. That company would be on firmer footing now, but would have gotten less HN/TechCrunch coverage in the process.

[1] https://www.forbes.com/sites/mattdrange/2017/01/04/medium-la...

[criddell]

So the venture funding is just giving them more rope to hang themselves with? It's letting them make bigger, more costly mistakes?

I would bet many of the investors were making a bet on Ev Williams as much as they were on Medium. Medium's business model has always felt a bit exploitative. If they truly are focusing on quality rather than quantity, maybe that will change.

[nordsieck]

> So the venture funding is just giving them more rope to hang themselves with? It's letting them make bigger, more costly mistakes?

Think of it more as forcing them to make a high variance bet.

The VC business model assumes that about 1/3 of the companies invested in will go to zero, and another 1/3 will make a below market return on investment. They need the Googles and Microsofts to pay for everyone else, so they just push all of their portfolio into trying to become billion dollar businesses.

[moorhosj]

To clarify, my point was specific to businesses like Quora and Medium that rely on high-quality content and engagement. These companies would have likely been better off as niche businesses with $10m-$50m annual revenue. Taking a large VC investment basically closes off that avenue.

[sbov]

Not every idea is a take-over-the-world multi billion dollar business. Something might be completely sustainable as a medium sized business but it will never have a large enough target audience to be able to scale (as the product was originally envisioned) to a multi billion dollar company.

The problem is this is what VC needs, and if your idea isn't one you're still stuck chasing that goalpost. So rather than be happy with your product you start making distortions to increase your mass appeal to help reach the unreasonably high (for your idea) goalposts set by VC funding.