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Tailscale has raised $160M

(tailscale.com)
655 points louis-paul | 1 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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vvpan ◴[08 Apr 25 18:30 UTC] No.43625018[source]▶
One of the main problems with raising too much is that you stop caring about product-market fit and can go on tangents that do not make you competitive. This is quiet common afaik.
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peterlk ◴[08 Apr 25 18:48 UTC] No.43625224[source]▶
Yes; you will burn through all the capital you raise in ~18 months. It is _extremely_ difficult to efficiently allocate large raises (100M+) in 18 months. In fact, I’m developing a pet thesis that no single human or business can efficiently allocate more than $100M. This would imply that any time a single raise is more than 100M, the investors always would have had a better return by splitting it into chunks of 100M or less. It’s not a _good_ thesis yet, just one I’m performing thought experiments with
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mmx1 ◴[08 Apr 25 21:11 UTC] No.43626511[source]▶
You can’t be serious. Lots of businesses easily have that much just in cost of goods or marketing spend. $100M is not such a crazy amount especially considering the cost of hiring technical people.

Also note that the benchmark of “efficiency” should be a function of growth, not some absolute standard.

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peterlk ◴[09 Apr 25 00:23 UTC] No.43627773{3}[source]▶
I think we are saying slightly different things. COGS are composed of many smaller capital allocations. According to this untested, pet thesis, putting on a report that $250M was spent on capex is just fine; but if you go to a single vendor and sign a $250M contract, you have wasted money by not being more careful about how that capital is allocated. $100M is _a lot_ of capital, and I think it’s easy to lose sight of how much stuff you can do with that much money when applied to industries that don’t pay tech salaries for speculative growth. As examples: how many pounds of food could you grow for 100M? How many doctors could we train for 100M?

I think the thesis is thought provoking. Not sure yet if it’s worth anything, but it also doesn’t preclude businesses from having massive cashflow.

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1. mmx1 ◴[09 Apr 25 21:07 UTC] No.43638010{4}[source]▶
I mean, it is obvious that you cannot sustain efficiency as you scale (Amdahl's law) but (1) $100M is not that crazy to be able to keep track of in your head, even for a single individual (I can imagine a successful real estate developer with a handful of ongoing projects and various other personal investments), and (2) in a high growth situation, it makes financial sense to sacrifice some economic gain for scale. In your original example, sure an investor would be better off, if they could actually find 10 good investments with zero cost, to spread their money, but very likely they'd be better off taking the big one and spend their energy raising more money.