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Why did they not take the largest bid at the end of season 1?

posted 7 years ago by jerseysprung
2 replies | jump to latest

I still don't understand that. If you have 3 or 4 VC firms bidding to fund your company, you always take the highest bid. More $$$, while leading to more expectations, is still more $$$. It just was not explained well enough why they didn't.

Monica explained that these VC firms will not even pay out the full amount of what they say they will fund until you hit benchmarks. So you are getting a little bit at a time. So why not accept the largest bid?

Then you had another plot when they brought in CEO Barker and replaced Richard. Richard was pissed. But, Richard still OWNED the company. Why wouldn't he support hiring someone that would make his company more valuable and thus he himself wealthy?

They also need to go somewhere with the Hooli vs Pied Piper thing. Seems like that entire storyline just goes in a circle.

[–] monkeyalien 7 years ago

You have to weigh the bid amount with how it would be disbursed and the terms that go along with it, such as benchmarks that have to be met. If you were shopping for bids from contractors to build your house would automatically accept the lowest bid, or would you weigh each of their reputations & past work, how soon they say they can start the work & reach certain milestones, and how they intend to accomplish what you want done?

Richard didn't want Barker because he (Richard) wanted to run his company.

(this signature was absent on picture day)

[–] Doc80 7 years ago

The issue comes down to valuation of the company. The higher the valuation the more pressure you are under to perform. This along with future fund raising are the keys to being a success.