The increase wasn't arbitrary. And neither is the initial 140 limit...
Originally, our constraint was 160 (limit of a text) minus username. But we noticed @biz got 1 more than @jack. For fairness, we chose 140. Now texts are unlimited. Also, we realize that 140 isn't fair—there are differences between languages. We're testing the limits. Hello 280!
If you invest in an LLC then you will be purchasing membership units. If you have membership units in an LLC, then you have to file a tax form every year (K1) that reports your portion of the earnings or losses from the LLC. The investor will have to pay the taxes on his portion of any profit generated by the LLC, even if the LLC didn't distribute any the profit.
Investors typically have dozens of investments. Filing K1s for all of your investments is a huge amount of work.
As an angel investor, I don't want to deal with that kind of hassle. If the company is losing money, it may want to carry forward the tax losses to offset future profits. If the company is making money, are you also going to distribute cash to your investors to offset the tax liability you just threw onto them? Will you get my K-1 to me well in advance of the April 15 filing deadline so I can plan my taxes, or will you piss me off by getting me a K-1 on Apr 14 and surprising me with a last minute tax liability? If any of your investors are non-US persons, now they have to file US income tax returns. These are the practical reasons why investors hate pass through entities.
The reason is that many of their LPs (e.g. pension funds) are non profits, and they can't have taxable income flow up to them or their Unrelated Business Taxable Income will threaten their nonprofit status. VCs are flow-thru entities so any income hitting them from _their_ investments would hit their LPs. Therefore they can only invest in blocking entities.
I agree with this, but out of curiosity, presumably the funds have their own blockers/SPVs below that they could just route their investments through and allow other investors in the startup to receive the flow-through treatment (like we would in hedge/PE). My assumption was that the standardized governance structure of a Corp was also appealing to VCs who prefer it to the possibility of being screwed by an adverse amendment to the LLCA, etc.
yes this is commonly done in PE but for whatever reason it's not done in VC. usually they say it's b/c of compensation via options but i don't actually believe there is a principled reason behind it.
If they do "insist" on this regardless of circumstances, it would not be ideal to partner with them since they clearly don't know what they are doing. And if you are partnering with someone, don't you want them to know what they are doing?
The list of VCs that insist on a C-Corp is essentially the list of VCs. So sure, you don't need to convert, but you won't ever be able to raise VC money without converting.
I find my comments, made over many years, to be civil and substantive. I find you dang to be a disruptive propaganda artist. Ban me if you wish as part of your viewpoint censorship efforts, I don't mind at all. I stand 100% behind all I said, and I denounce you dang as an enemy of democracy and truth. Only you can live with the hate in your heart, your dishonesty, your censorship, and your war against truth and reality. You make your bed of dishonesty, corruption, censorship and manipulation, and you lay in it. It is your choice to do so, and in so doing to harm humanity.
I'll couch it more, every single VC I've ever taken money from, talked to about taking money, or read about their criteria for taking money requires a C-Corp. After a short search, I've found precisely one company who remained a LLC while taking VC money (Seedinvest who raised from a number of small seed-stage VCs). Are there others I'm missing?
The author titles his post "Never accept a counter-offer", and says: "By saying you have to be prepared for it, I meant that you should never accept a counter offer."
Just because he later contradicts himself, doesn't make it good writing. You can't have it both ways.
The way I see it with the author stating "(your cat dies and you need bunch of money to save her)." is that only the person that is in the situation can assess the situation. The article talks broadly, but one should still take that particular situation (edge case) into consideration. Tough, it's rarely possible to judge an outcome correctly.
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I'm a strong full-stack developer with expertise in javascript and nodejs. I've been coding as a hobby for 10 years with 5 years of startup experience, 2 years of big co experience, with the rest being side projects.
A business can report one business unit (The bit that hires drivers and sends them out) is 'profitable', and also have an overall in-the-red because other business units aren't. I've not read the presentation, but it may be that Uber is trying to show their engineering costs and operations costs as two business units to better represent how the business scales (Engineering costs go up only logarithmically, while operations go 1:1 with revenue).
React Nexus basically recursively traverses the react component tree and calls getNexusBindings on each component (recreating what react does natively with its lifecycle methods).
However, this incurs the cost of instantiating each component in the tree twice. Once for traversing asynchronously for data, again for React.renderToString or React.render
This would cause slower initial page loads for SPAs. Otherwise, very cool implementation.
The increase wasn't arbitrary. And neither is the initial 140 limit...
Originally, our constraint was 160 (limit of a text) minus username. But we noticed @biz got 1 more than @jack. For fairness, we chose 140. Now texts are unlimited. Also, we realize that 140 isn't fair—there are differences between languages. We're testing the limits. Hello 280!
https://twitter.com/biz/status/912783936123691009