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Tailscale has raised $160M

(tailscale.com)
655 points louis-paul | 5 comments | 08 Apr 25 10:36 UTC | HN request time: 0s | source
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tmpz22 ◴[08 Apr 25 17:51 UTC] No.43624557[source]▶
If they had taken just say $40 million would they be able to sustain their project for the foreseeable future and perhaps not yield as much future product direction and equity?

I honestly don't know how this big dealmaking works but it strikes me that when you take out this big of an obligation that the obligation has a gravity that may drag you in a direction you (or consumers) do not want to go.

Love Tailscale as a product (as does everyone I talk to) but genuinely want to learn more about the trade-offs as usually when we see big dollar signs all we do is celebrate.

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lazzlazzlazz ◴[08 Apr 25 18:02 UTC] No.43624690[source]▶
Equity investments like this don't need to be repaid, so there isn't a legal obligation to repay them. Of course, there is an obligation to maximize shareholder value — but that is totally independent of the dollar amount invested.

When founders raise this much money, it's because there's (1) a lot they want to do and hire for, or (2) they don't want to worry about monetizing the product for a significant period and focus on growth or product development.

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1. mitthrowaway2 ◴[08 Apr 25 18:04 UTC] No.43624713[source]▶
GP didn't talk about "repaying" anything. Taking 160M instead of 40M at the same valuation means giving up 4x the shares, and that's going to result in a bigger voice for those investors at the table in making decisions about the future path of the company.
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2. firloop ◴[08 Apr 25 18:12 UTC] No.43624796[source]▶
What if they were offered $160mm and Tailscale countered with 4X the valuation, lowering the number of shares by 75%? Similarly, what if they wanted $40mm but the only deal on the table was $160mm due to ownership targets of funds that can actually write $40mm+ checks? It's hard to play these armchair games, even less so when the terms aren't known.
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3. santoshalper ◴[08 Apr 25 18:21 UTC] No.43624878[source]▶
You're right that we don't know all the terms, but $160M raised is not small and it is very reasonable to worry about what level of control will be given up long term because of it.
4. nradov ◴[08 Apr 25 18:34 UTC] No.43625073[source]▶
That depends on the share classes. Companies with high interest from investors can sometimes get them to accept shares with reduced voting rights.
5. MrDarcy ◴[08 Apr 25 20:30 UTC] No.43626142[source]▶
409a valuations are made up by independent appraisals, but it’d be quite strange for an investor to agree a share is worth 4 times the appraised value.