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Secondary shops flooded with unicorn sellers

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Re: Secondary shops flooded with unicorn sellers

#41

Post by throw2192015 »

shostack wrote: post #36
throw2192015 wrote: post #15

Earlier quoted context omitted.

I have participated as a seller. I offered some of my exercised options for sale on SharesPost [1]. The SharesPost representative contacted me; she said that she had a potential buyer interested, but the bid was slightly lower than my initial ask and the volume they wanted to buy was a little lower than what I had offered to sell initially. We agreed on the deal. I filled out some paperwork and sent proof that I was…

How did things work out from a tax perspective if you don't mind my asking? Also, what sort of communication did you have with your company before/during this transaction regarding it? Is this the kind of thing employers might freak out about if they are blindsided by the request?

> How did things work out from a tax perspective if you don't mind my asking?

The proceeds I got from the sale were treated as long-term capital gains. I got a 1099-B from SharesPost.

> Also, what sort of communication did you have with your company before/during this transaction regarding it?

I mentioned my desire to sell some of my stock to my manager. I was directed to speak to the head of legal department. Here is what I learned that person. The company could not provide me with a buyer, or advice me to sell/hold etc. But once I found a buyer, the company was bound to agree to that sale or direct me to another buyer who was offering at least the same price.

Re: Secondary shops flooded with unicorn sellers

#42

Post by danjayh »

sawthat wrote: post #39
danjayh wrote: post #23

I think that this is just the beginning. In my opinion, we're heading for a tech bust that's going to spread to the rest of the economy, and deflate additional bubbles (housing, for one). The government has been pushing cheap money for the better part of a decade in the name of creating the appearance of a 'recovery', but what they've really done is build a new house of cards. Make no mistake: the 'free' money that's…

I predict, that in the future, there will be a recession. Also, at some point, an economic boom. Feel free to quote me on that. I am unable to give exact dates, but there is a 25% chance that it will begin in the spring (what year, I cannot say)

I'll nail it down a little for you. I think it's going to be within two years, based purely on asset valuation : income ... which isn't a particularly sophisticated way to analyze it, but when people can't afford things anymore, they stop buying them, and that has predictable effects.

Re: Secondary shops flooded with unicorn sellers

#43

Post by pfarnsworth »

danjayh wrote: post #23

I think that this is just the beginning. In my opinion, we're heading for a tech bust that's going to spread to the rest of the economy, and deflate additional bubbles (housing, for one). The government has been pushing cheap money for the better part of a decade in the name of creating the appearance of a 'recovery', but what they've really done is build a new house of cards. Make no mistake: the 'free' money that's…

The money under Bush went to the Iraq war, which benefited the "big guys", not the small guys. The small guys have yet to ever benefit from anything.

Re: Secondary shops flooded with unicorn sellers

#44

Post by pfarnsworth »

danjayh wrote: post #40
shostack wrote: post #33

Earlier quoted context omitted.

Do you have data to support that a few unicorn valuations being corrected will spread to the rest of the economy, particularly housing and not just be largely limited to private markets and investors?

Yes and no. With regard to spreading, just prior observation that adjustments tend to spread. With regard to housing, the observation that the median home price : median income ratio is now above 5.2x, while at the last peak it was only at ~5x. The rate of growth is lower this time, but I don't think it matters because the ratio is still really bad. http://politicalcalculations.blogspot.com/2015/04/the-curren...

During the last bust home prices went up not down. Because investment rotated from stocks to housing. Why won't that happen again, especially with ZIRP?

Re: Secondary shops flooded with unicorn sellers

#45

Post by danjayh »

pfarnsworth wrote: post #43
danjayh wrote: post #23

I think that this is just the beginning. In my opinion, we're heading for a tech bust that's going to spread to the rest of the economy, and deflate additional bubbles (housing, for one). The government has been pushing cheap money for the better part of a decade in the name of creating the appearance of a 'recovery', but what they've really done is build a new house of cards. Make no mistake: the 'free' money that's…

The money under Bush went to the Iraq war, which benefited the "big guys", not the small guys. The small guys have yet to ever benefit from anything.

I was referring specifically to the cheap debt. Yes, the much of the spent money under Bush went to the Iraq war, and under Obama much of it went to 'stimulus', and both items hurt us all (through inefficient use of resources) while benefiting large enterprises.

Re: Secondary shops flooded with unicorn sellers

#46

Post by Domenic_S »

danjayh wrote: post #23

I think that this is just the beginning. In my opinion, we're heading for a tech bust that's going to spread to the rest of the economy, and deflate additional bubbles (housing, for one). The government has been pushing cheap money for the better part of a decade in the name of creating the appearance of a 'recovery', but what they've really done is build a new house of cards. Make no mistake: the 'free' money that's…

> in many areas the median house now costs enough that it's beyond the reach of the median person

I don't see it. Maybe bubbly areas like SJ will correct a bit, but at the end of the day real estate is a supply/demand calculation. YoY% increases don't look like they did in the last bubble.

The more people who want to live somewhere -- whether renters or buyers -- the higher the prices go, until sales start dropping off. Real estate is like anything else: it's worth whatever you can convince someone to pay.

Re: Secondary shops flooded with unicorn sellers

#47

Post by pjc50 »

danjayh wrote: post #23

I think that this is just the beginning. In my opinion, we're heading for a tech bust that's going to spread to the rest of the economy, and deflate additional bubbles (housing, for one). The government has been pushing cheap money for the better part of a decade in the name of creating the appearance of a 'recovery', but what they've really done is build a new house of cards. Make no mistake: the 'free' money that's…

The trouble is that widespread leverage means that asset price falls detonate the entire system unless capital is backfilled somehow. That was why state credit was so widely extended to banks in trouble: the risk that collapsing bank A is in debt to bank B, which then collapses in turn taking out banks C, D, E, the payments settlement system, and the ability of people to get money out of ATMs.

It's not so much that any one entity is "too big to fail", but all the big entities are too interlinked so they cannot fail separately.

Re: Secondary shops flooded with unicorn sellers

#48

Post by nradov »

mmanfrin wrote: post #2

Semi related question: One has to be an accredited (i.e. wealthy) investor to invest in startups, but this does not apply to employees exercising options. Does that mean that employees who do not meet the wealth requirements to be accredited are only ever able to sell ownership, and only to accredited investors?

The dirty little secret is that most of those secondary market exchanges don't really verify accredited investor status. They just do the bare minimum to check off the boxes and ensure SEC compliance. Acquaintances of mine were able to purchase shares by simply lying about their incomes and assets.

Re: Secondary shops flooded with unicorn sellers

#49

Post by dkarapetyan »

jessedhillon wrote: post #35
dkarapetyan wrote: post #28

Earlier quoted context omitted.

But the fundamentals were not ads. It was solid search. That's what delivered value to users and why they kept coming back.

you are confusing business and technology fundamentals. Business fundamentals -- bottom-line numbers on the P&L statement -- are not furthered by increasing the number of active users alone, or by delighting users. Only ad revenue would increase the fundamentals being discussed here.

I disagree with the overall sentiment. Doing the right thing technology-wise and delighting users is what made google possible. Technology fundamentals != business fundamentals but the pre-not-bubble-but-maybe-bubble market did not have either one. Many companies were pure buzz with neither business nor technology figured out.

Re: Secondary shops flooded with unicorn sellers

#50

Post by mavelikara »

shostack wrote: post #38
mavelikara wrote: post #18

Earlier quoted context omitted.

Depends on the terms under which the employee is issued stock. From a 2014 article[1]: Two months ago, an early Uber employee thought that he had found a buyer for his vested stock, at $200 per share. But when his agent tried to seal the deal, Uber refused to sign off on the transfer. Instead, it offered to buy back the shares for around $135 a piece, which is within the same price range that Google Ventures and TPG…

Really interesting, thanks for sharing. Does this generally piss off the employer? I wonder if the employee faced any sort of retaliation or anything from this.

> Does this generally piss off the employer? I wonder if the employee faced any sort of retaliation or anything from this.

No, it should not piss off any employer!

The equity that is offered to you to as part of your employment is remuneration for your efforts. The employer should not be upset at you for wanting to convert that to cash. It is true that the employer might not want their stock to go to outside parties. In that case, they should arrange for alternate arrangements (buybacks, employee-liquidity in funding rounds etc). But you are not doing anything inherently unethical to warrant any retaliation.

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