Comments on: PBwiki raises $2 million

By: I Will Teach You To Be Rich » Life at a Silcon Valley Startup: PBwiki

I Will Teach You To Be Rich » Life at a Silcon Valley Startup: PBwiki — Fri, 28 Mar 2008 00:28:43 +0000

[...] Raised just over $2 million in venture capital [...]

By: Festivus

Festivus — Sat, 12 Jan 2008 18:19:14 +0000

I don’t know much about wikis and don’t care much either. But I just wanted to commend Paul’s comment on the two models of wealth in the PF blogger universe – i.e. the scarcity model and the prosperity model. Unfortunately it seems that 99% of the PF blogs out there focus on the scarcity model, as you say live like a hermit and save every penny they can until they’re old and grey. It annoys me to no end. Sure saving is important, that much is obvious. Everyone that doesn’t live below their means KNOWS its wrong, does this really need to be repeated endlessly on PF blogs? The relatively meager amounts of money most PF bloggers focus on gaining through little things are meaningless when compared to the money you could be earning if you applied yourself more. I work in finance, and like Ramit, me and most of my friends went to top Ivy League schools, though on the east coast and instead of going to Silicon Valley we went to Wall Street (I’m Indian also). Most of us are in our mid to late 20s or early 30s and I’d say most have salaries between $300k to over $1MM. Most of us also have an entrepreneurial goal as well but we want to be very liquid first. Alternatively you can just stay in this business and amass millions, its very common. Silicon Valley offers similar opportunities, while salaries don’t compare to Wall Street, there is always the opportunity of making millions (or billions) through a startup, whether its yours or just one that you join early and becomes successful. From my readings of PF blogs they typically have a cynical attitude towards people who make a lot of money, you constantly read comments from the bloggers suggesting people who make a lot also spend all their money which is just retarded. I feel sorry for the typical PF blogger, they come across as total hermits who load up on cheap pasta and cringe at the thought of spending money for a kick-ass night out on the town. What’s the point of living if all you’re doing is preparing for retirement?

By: I Will Teach You To Be Rich » PBwiki is hiring a support manager and you might be perfect

Thu, 27 Sep 2007 02:03:28 +0000

[...] I wrote about how PBwiki raised $2 million in venture financing. Now we’re looking for a superstar to lead our support efforts. I’ll give you an [...]

By: I Will Teach You To Be Rich » Some people think there’s only a limited amount of money

Thu, 29 Mar 2007 14:39:03 +0000

[...] Paul pointed out in my post about PBwiki raising venture money, There’s two models of getting rich that seem [...]

By: Gary

Gary — Fri, 09 Mar 2007 14:34:15 +0000

Congratulations, indeed.

Nice when you can do the things you write about!

And a special thank you — the link to the PBWiki blog announcement introduced me to Hello Boss coffee. Awesome!

By: Worldwide Success » Wikinomics

Worldwide Success » Wikinomics — Wed, 28 Feb 2007 04:19:26 +0000

[...] recently PBWiki received $2 million in VC funding as announced by Ramit in the post PBWiki raises $2 million. The site caters to educators, businesses and any individual who can benefit from the power [...]

By: Slasher

Slasher — Tue, 27 Feb 2007 14:51:45 +0000

Actually, dealing with with VCs is not like dealing with the devil. Quite the contrary. It’s like dealing with really savvy business people. That’s all. Savvy business people (such as VCs) will trump a new entrepreneur any day.

VCs don’t control 51% of the company if the company doesn’t keep asking for more funding. A typical early stage round requires anywhere from 20 and 30% of the company. Now, if you want more money, you would have to keep giving up the stake in the company. This is why it’s essential to make sure your idea is worthy and not a BS product.

VCs don’t need 51% to control the company. They will control the company even with 1% of the company because of common vs. preferred stock. It gives them all the control they need – the control to block an acquisition, remove current management, fire original founders etc.

And $2 million is about typical for a early stage company.

Everything is very normal from what Ramit tells us. Congratulations to Ramit and the PBWiki team.

By: Alex Gierus

Alex Gierus — Tue, 27 Feb 2007 03:59:38 +0000

Responding to Badddriver:

Making a deal with a VC firm is like making a deal iwith the devil. They typically want 51% ownership in the company plus 25% a year on the loan amount for a set period of time (usually 5 years) At the end of the 5 years they want an exit strategy, usually sell the company privately or IPO and cash out. How is this similar or different for a web-based VC funded project?

VCs are not the devil, they only want money, just like most businesses. They look for potentially big ideas, buy a piece of them, then try to make money. The ideas they like are:

3) Ideas where they can get control (that’s your 51%) because usually the inventor is emotionally involved and not a good business-person. They BUY this percentage so it isn’t a loan. They are in the risk with the inventor. If the inventor is also a good business person or they work out some arrangement then the VC could easily go in for less. Keep in mind that VCs also have a preferred deal size. Very few VCs will invest $50K for example.

2) Ideas that have an exit strategy like, as you said, IPO or buyout so they can get their profits. No sense investing $2M in a business that won’t pay back.

1) The biggest point for good VCs are businesses they can actually help. Inventors really benefit from “smart money”. That is, VCs with a lot of contacts and business resources to help grow the idea fast.

$2M seems like a fairly small amount for a “venture capital” phase. 3 Stanford grads with good connections might have been able to round that amount up on their own through their network. That they didn’t tells me that PBWiki is going to benefit from the experience and contacts along with the money being invested.

By: K

Mon, 26 Feb 2007 17:38:21 +0000

Hhhmmm…no posts since Thursday. I’m thinking Ramit really is out spending the cash. LOL

By: Marcus Sonsteby

Marcus Sonsteby — Mon, 26 Feb 2007 03:59:09 +0000

Thanks, I’m really starting to put PBWiki to use in film preproduction.