I was talking with someone the other day about my Lineo experiences, and it recalled to my mind just how insane the dot-com boom was. Lineo was on a strong path to IPO - we had almost no revenues (a few million dollars), were grossly unprofitable, had no differentiating product (embedded Linux, which customers were happy to buy consulting around, but not pay for the software itself, and wouldn't pay anything for support), and had a massive burn rate.
This was IPO material?
To be fair to us, a large reason that we had the burn rate was because our investment bankers (very respectable, big-name bankers, mind you) told us that we needed a large employee base to justify a high valuation. Think about that for a minute. Not revenues. Not profits. Employees. And so we acquired 6 companies, went from 40 to 440 people virtually overnight, and completed our S-1. …
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