Reply to post: Re: New Laws Needed

VMware discontinues Datrium hardware and hyperconverged OS, effective immediately

Anonymous Coward
Anonymous Coward

Re: New Laws Needed

So lets walk through this:

A startup burned through 180 million dollars. They got a few hundred customers maybe and were going to run out of money. The options were.

1. They run out of money and shutdown. (Maxta)

2. They get bought by someone who keeps them around, but only 2 support people are kept through the transition to the new company (Tintri)

3. VMware buys them, and keeps 100% of the engineering and support staff, gets the next release out the door, takes one last order, and honors all the existing support agreements and allows fresh 3 year extensions.

You are saying that you want laws created to prevent #3 from happening, and you don't think #1 is going to happen instead? Unless your law FORCES all companies to be bought by another company (which I'm not sure how that happens) you'll see more companies just shut down.

As this law would make most acquisitions unprofitable, this also means there will be less VC for new startups (if the only exit is IPO, we are going to see 80% fewer startups). The end result would be startups with edgier ideas would just be founded outside of the United States in a place with friendlier laws.

Another solution would be:

Require startups disclose their current burn rate, and cash reserves to customers upon request.

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