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Jun 13, 2016 · 21m · top-founders

Shocked Subbu Wouldn't Accept my $10M Offer after Raising $1M This Year, EP 282: Subbu Rama

Nathan Latka · 10m spoken Subbu Rama · 8m spoken Promo Voice · 1s spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

Recorded live at SXSW, this episode of 'The Top' features host Nathan Latka interviewing Bitfusion co-founder and CEO Subbu Rama, who discusses leaving big tech, raising a $1.5 million seed round, and building supercomputing virtualization software while rejecting early multi-million-dollar buyout offers.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 53.7% of the talking time here. How this is scored →

Nathan as informed peer 3.8 Guest teaching 2.4 Guest disagreement 3.0 Nathan pushing back 3.4
05100:0010:0020:002:11–5:12 · Nathan as informed peer 4/10 Bitfusion's Supercomputing Virtualization Technology Explained Nathan frames Bitfusion's tech as stealing processing power and brings up industry parallels like Mohit at Cohesity. Subbu smoothly elaborates on virtualization and enterprise data center economics without tension.5:12–7:19 · Nathan as informed peer 4/10 Co-Founder Equity Allocation and Trust Dynamics Nathan criticizes an equal three-way equity split as the lazy way to do it and prods on vesting schedules. Subbu pushes back firmly, justifying equal ownership by citing deep personal trust and long-term company value over trivial percentage points.7:19–11:32 · Nathan as informed peer 5/10 Fast-Tracking a $1.5M Seed Round via SAFE Note Nathan drills aggressively into Bitfusion's financials, demanding exact revenue figures and burn rate. Subbu holds his ground and refuses to give precise revenue, yielding only vague upper bounds.11:33–14:11 · Nathan as informed peer 4/10 Series A Strategy and Rejecting a $10M Buyout Offer Nathan poses a hypothetical acquisition offer of $10M to $20M from Rackspace. Subbu instantly dismisses it, explaining that Bitfusion aims to become the VMware of software-defined compute.14:12–18:13 · Nathan as informed peer 2/10 Social Handles, HostGator Promotion, and Listener Giveaways A collaborative rapid-fire Famous Five round interspersed with mid-roll promo announcements, maintaining a lighthearted and friendly tone.2:11–5:12 · Guest teaching 2/10 Bitfusion's Supercomputing Virtualization Technology Explained Nathan frames Bitfusion's tech as stealing processing power and brings up industry parallels like Mohit at Cohesity. Subbu smoothly elaborates on virtualization and enterprise data center economics without tension.5:12–7:19 · Guest teaching 4/10 Co-Founder Equity Allocation and Trust Dynamics Nathan criticizes an equal three-way equity split as the lazy way to do it and prods on vesting schedules. Subbu pushes back firmly, justifying equal ownership by citing deep personal trust and long-term company value over trivial percentage points.7:19–11:32 · Guest teaching 2/10 Fast-Tracking a $1.5M Seed Round via SAFE Note Nathan drills aggressively into Bitfusion's financials, demanding exact revenue figures and burn rate. Subbu holds his ground and refuses to give precise revenue, yielding only vague upper bounds.11:33–14:11 · Guest teaching 3/10 Series A Strategy and Rejecting a $10M Buyout Offer Nathan poses a hypothetical acquisition offer of $10M to $20M from Rackspace. Subbu instantly dismisses it, explaining that Bitfusion aims to become the VMware of software-defined compute.14:12–18:13 · Guest teaching 1/10 Social Handles, HostGator Promotion, and Listener Giveaways A collaborative rapid-fire Famous Five round interspersed with mid-roll promo announcements, maintaining a lighthearted and friendly tone.2:11–5:12 · Guest disagreement 1/10 Bitfusion's Supercomputing Virtualization Technology Explained Nathan frames Bitfusion's tech as stealing processing power and brings up industry parallels like Mohit at Cohesity. Subbu smoothly elaborates on virtualization and enterprise data center economics without tension.5:12–7:19 · Guest disagreement 4/10 Co-Founder Equity Allocation and Trust Dynamics Nathan criticizes an equal three-way equity split as the lazy way to do it and prods on vesting schedules. Subbu pushes back firmly, justifying equal ownership by citing deep personal trust and long-term company value over trivial percentage points.7:19–11:32 · Guest disagreement 4/10 Fast-Tracking a $1.5M Seed Round via SAFE Note Nathan drills aggressively into Bitfusion's financials, demanding exact revenue figures and burn rate. Subbu holds his ground and refuses to give precise revenue, yielding only vague upper bounds.11:33–14:11 · Guest disagreement 5/10 Series A Strategy and Rejecting a $10M Buyout Offer Nathan poses a hypothetical acquisition offer of $10M to $20M from Rackspace. Subbu instantly dismisses it, explaining that Bitfusion aims to become the VMware of software-defined compute.14:12–18:13 · Guest disagreement 1/10 Social Handles, HostGator Promotion, and Listener Giveaways A collaborative rapid-fire Famous Five round interspersed with mid-roll promo announcements, maintaining a lighthearted and friendly tone.2:11–5:12 · Nathan pushing back 1/10 Bitfusion's Supercomputing Virtualization Technology Explained Nathan frames Bitfusion's tech as stealing processing power and brings up industry parallels like Mohit at Cohesity. Subbu smoothly elaborates on virtualization and enterprise data center economics without tension.5:12–7:19 · Nathan pushing back 5/10 Co-Founder Equity Allocation and Trust Dynamics Nathan criticizes an equal three-way equity split as the lazy way to do it and prods on vesting schedules. Subbu pushes back firmly, justifying equal ownership by citing deep personal trust and long-term company value over trivial percentage points.7:19–11:32 · Nathan pushing back 6/10 Fast-Tracking a $1.5M Seed Round via SAFE Note Nathan drills aggressively into Bitfusion's financials, demanding exact revenue figures and burn rate. Subbu holds his ground and refuses to give precise revenue, yielding only vague upper bounds.11:33–14:11 · Nathan pushing back 4/10 Series A Strategy and Rejecting a $10M Buyout Offer Nathan poses a hypothetical acquisition offer of $10M to $20M from Rackspace. Subbu instantly dismisses it, explaining that Bitfusion aims to become the VMware of software-defined compute.14:12–18:13 · Nathan pushing back 1/10 Social Handles, HostGator Promotion, and Listener Giveaways A collaborative rapid-fire Famous Five round interspersed with mid-roll promo announcements, maintaining a lighthearted and friendly tone.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 78.8% · guest 21.2%0:00 · Nathan 78.8% · guest 21.2%3:00 · Nathan 31.1% · guest 68.9%3:00 · Nathan 31.1% · guest 68.9%6:00 · Nathan 40.2% · guest 59.8%6:00 · Nathan 40.2% · guest 59.8%9:00 · Nathan 31.1% · guest 68.9%9:00 · Nathan 31.1% · guest 68.9%12:00 · Nathan 45.2% · guest 54.8%12:00 · Nathan 45.2% · guest 54.8%15:00 · Nathan 63.8% · guest 36.2%15:00 · Nathan 63.8% · guest 36.2%18:00 · Nathan 77.4% · guest 22.6%18:00 · Nathan 77.4% · guest 22.6%21:00 · Nathan 100% · guest 0%21:00 · Nathan 100% · guest 0%
Sharpest disagreement ▶ 13:26 Instant refusal of acquisition offers

Subbu flatly and repeatedly rejects Nathan's hypothetical acquisition offers of $10M and $20M, insisting his vision is to build an independent multi-billion dollar giant like VMware.

 Hardest push from Nathan ▶ 5:19 Calling 33% split the lazy way

Nathan directly challenges Subbu's equity division, calling an even split the lazy way out and questioning whether the founders had tough conversations regarding unequal future workloads.

 Biggest teaching moment ▶ 5:56 Subbu reframing founder equity and trust

Subbu educates Nathan on long-term startup mindset, explaining that minor equity percentages do not matter when building a $100M+ company among trusted colleagues.

 Nathan holds their own ▶ 10:28 Relentless bracketed revenue inquiry

Nathan repeatedly corners Subbu with higher/lower financial brackets to force out actual revenue numbers when Subbu attempts to withhold the data.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Bitfusion's Supercomputing Virtualization Technology Explained 4211 Nathan frames Bitfusion's tech as stealing processing power and brings up industry parallels like Mohit at Cohesity. Subbu smoothly elaborates on virtualization and enterprise data center economics without tension.
Co-Founder Equity Allocation and Trust Dynamics 4445 Nathan criticizes an equal three-way equity split as the lazy way to do it and prods on vesting schedules. Subbu pushes back firmly, justifying equal ownership by citing deep personal trust and long-term company value over trivial percentage points.
Fast-Tracking a $1.5M Seed Round via SAFE Note 5246 Nathan drills aggressively into Bitfusion's financials, demanding exact revenue figures and burn rate. Subbu holds his ground and refuses to give precise revenue, yielding only vague upper bounds.
Series A Strategy and Rejecting a $10M Buyout Offer 4354 Nathan poses a hypothetical acquisition offer of $10M to $20M from Rackspace. Subbu instantly dismisses it, explaining that Bitfusion aims to become the VMware of software-defined compute.
Social Handles, HostGator Promotion, and Listener Giveaways 2111 A collaborative rapid-fire Famous Five round interspersed with mid-roll promo announcements, maintaining a lighthearted and friendly tone.

Statements from this episode (9)

Assertion Not checkable as stated
Rama: Hardware and infrastructure engineers generally earn $250K annually
“Everybody in our industry basically, you know, generally makes about close to a quarter million dollars a year.”
Subbu Rama Jun 13, 2016 ▶ 3:52
Insight
Rama: Equal co-founder equity splits prevent long-term resentment
“No, we actually did that actually, because, you know, if you think about it, right, that, I think that's the right way to do it. The reason is, ah, you don't want one person to feel that, you know, ah, that person's putting more work, but like getting less equ…”
Subbu Rama Jun 13, 2016 ▶ 5:22
Disclosure
Rama: Bitfusion co-founders skipped vesting schedules before raising capital
“Actually, in fact, when we initially signed the founders' agreement before we raised equity, ah, we didn't have an investing schedule.”
Subbu Rama Jun 13, 2016 ▶ 6:58
Disclosure
Rama: Bitfusion raised approximately $1.5M in April 2015
“We raised about 1.5 million dollars, you know we actually raised last year around, you know, end of April is when we raised.”
Subbu Rama Jun 13, 2016 ▶ 7:29
Disclosure
Rama: Bitfusion closed its $1.5M seed round in just two weeks
“We basically opened our round around the first week of April. We were done in two weeks.”
Subbu Rama Jun 13, 2016 ▶ 7:46
Disclosure
Rama: Bitfusion raised its seed round using free YC SAFE templates
“We just went online, downloaded what Paul Graham had, printed it, didn't, you know, didn't have to spend any big money on lawyers.”
Subbu Rama Jun 13, 2016 ▶ 8:25
Assertion Not checkable as stated
Rama: Bitfusion secured Shell and five other customers within three months
“Since we've released our product in just, like, you know, ah, three months, we basically have about half a dozen customers. Ah, customers range from, you know, ah, cloud service providers, ah, all the way up to, like, oil and gas companies like Shell.”
Subbu Rama Jun 13, 2016 ▶ 9:12
Assertion Not checkable as stated
Rama: Bitfusion burns less than $100K in cash per month
“Less than a hundred K. Our budget is less than a hundred K.”
Subbu Rama Jun 13, 2016 ▶ 11:19
Prediction Not checkable as stated
Rama: Bitfusion could match VMware's scale if executed correctly
“We think this could be as big as VMware, if we executed right in the next few years.”
Subbu Rama Jun 13, 2016 ▶ 13:47
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