Bitwarden has been a wonderful password manager (I've been paying for premium for several years now), but this worries me a bit. Investors always want returns, and I worry about the ways they...
Bitwarden has been a wonderful password manager (I've been paying for premium for several years now), but this worries me a bit. Investors always want returns, and I worry about the ways they might seek to get them.
That said, assuming they keep their morals, I am quite curious what they're planning in regards to this:
You will also see Bitwarden expand those efforts into areas such as passwordless, with new login options between Bitwarden clients, and developer solutions, to assist in the expansion of developer cloud deployments so prevalent today
I would note, though, that people tend to overestimate the manner and avenues through which they do that. Investors are not loaners - they're not trying to have the company "return" their money +...
Investors always want returns, and I worry about the ways they might seek to get them.
I would note, though, that people tend to overestimate the manner and avenues through which they do that. Investors are not loaners - they're not trying to have the company "return" their money + some delta. They don't have mechanisms for forcefully "withdrawing" money from the company (equity investment, especially early stage ones, is considered a high risk investment compared to debt!)
Early stage investors mainly make their money from increases in equity value once the company hits a liquidity event (an IPO, for instance), as opposed to dividends or other direct cash transfers from the company.
Investors can pressure the company if the disgruntled ones have a majority voting share - I would note, however, that many tech companies have, uh, "interesting" voting share structures wherein the founders will always have voting control. For instance, you've probably heard about "investors" pressuring Meta/Facebook, but that's bunk - Zuck has, and will always have, absolute control over the company, as he will always have the majority voting share even though he is now a minority shareholder.
If the a majority of the voting share wants change, they can change the C-suite, authorize M&A, and so forth, if the company is not heading in a direction they want.
In this case, from the announcement Bitwarden has sold a minority stake to PSG and other investors. Now, there's usually soft reasons to want your investors to be happy - continual investment, for instance. But if Bitwarden just did things they didn't want, PSG and co have pretty much no hard mechanisms to make Bitwarden do anything. Early stage investment is considered a scary thing, after all, before interest rates cratered at the start of the millenia and the big pool of money had to go somewhere, anywhere at all.
That's not to say that you shouldn't necessarily be worried - it certainly indicates that the Bitwarden founders have more ambitions than just to be a cost-meeting, lowkey password vault, which can be good or bad depending on perspective. I just think there's a lot of FUD over the word "investment" at this point. For a lot of tech companies, it's a symptom rather than cause.
The superhard growth search is mainly driven by the founders in the end, rather than they being victims of puppeteering investors. Of course, hardcore 20x growth founders will seek outside investment way more often than your humble, bootstrapping startup.
I think the fundamental problem is that substantial amounts of "investment" that hits front pages is really just "influx of funds to keep lights on while we struggle to monetize our base". Or...
I just think there's a lot of FUD over the word "investment" at this point. For a lot of tech companies, it's a symptom rather than cause.
I think the fundamental problem is that substantial amounts of "investment" that hits front pages is really just "influx of funds to keep lights on while we struggle to monetize our base". Or "cashing out for big IPO/buyout". Which often leads to a decline in the existing service in one fashion or another.
It's because "pull additional capital to accelerate growth of an already-profitable business" is generally much-less newsworthy. So if this happens, there's a lot of incentive for news sites to market it as the former.
Bitwarden has been a wonderful password manager (I've been paying for premium for several years now), but this worries me a bit. Investors always want returns, and I worry about the ways they might seek to get them.
That said, assuming they keep their morals, I am quite curious what they're planning in regards to this:
Other sources:
https://www.businesswire.com/news/home/20220906005153/en/Bitwarden-Announces-100-Million-Growth-Investment-Led-by-PSG-to-Further-its-Mission-to-Empower-Businesses-and-Individuals-to-Stay-Safe-Online
https://www.psgequity.com/news/bitwarden-announces-100-million-growth-investment-led-by-psg
I would note, though, that people tend to overestimate the manner and avenues through which they do that. Investors are not loaners - they're not trying to have the company "return" their money + some delta. They don't have mechanisms for forcefully "withdrawing" money from the company (equity investment, especially early stage ones, is considered a high risk investment compared to debt!)
Early stage investors mainly make their money from increases in equity value once the company hits a liquidity event (an IPO, for instance), as opposed to dividends or other direct cash transfers from the company.
Investors can pressure the company if the disgruntled ones have a majority voting share - I would note, however, that many tech companies have, uh, "interesting" voting share structures wherein the founders will always have voting control. For instance, you've probably heard about "investors" pressuring Meta/Facebook, but that's bunk - Zuck has, and will always have, absolute control over the company, as he will always have the majority voting share even though he is now a minority shareholder.
If the a majority of the voting share wants change, they can change the C-suite, authorize M&A, and so forth, if the company is not heading in a direction they want.
In this case, from the announcement Bitwarden has sold a minority stake to PSG and other investors. Now, there's usually soft reasons to want your investors to be happy - continual investment, for instance. But if Bitwarden just did things they didn't want, PSG and co have pretty much no hard mechanisms to make Bitwarden do anything. Early stage investment is considered a scary thing, after all, before interest rates cratered at the start of the millenia and the big pool of money had to go somewhere, anywhere at all.
That's not to say that you shouldn't necessarily be worried - it certainly indicates that the Bitwarden founders have more ambitions than just to be a cost-meeting, lowkey password vault, which can be good or bad depending on perspective. I just think there's a lot of FUD over the word "investment" at this point. For a lot of tech companies, it's a symptom rather than cause.
The superhard growth search is mainly driven by the founders in the end, rather than they being victims of puppeteering investors. Of course, hardcore 20x growth founders will seek outside investment way more often than your humble, bootstrapping startup.
I think the fundamental problem is that substantial amounts of "investment" that hits front pages is really just "influx of funds to keep lights on while we struggle to monetize our base". Or "cashing out for big IPO/buyout". Which often leads to a decline in the existing service in one fashion or another.
It's because "pull additional capital to accelerate growth of an already-profitable business" is generally much-less newsworthy. So if this happens, there's a lot of incentive for news sites to market it as the former.