41–50 of 172 posts
Earlier quoted context omitted.
This is bad advice.
My advice was to have perspective that things could be worse. To have that perspective is never bad advice. ;)
Sell at the valuation, e.g. 5% of $XX,000,000. Maybe offer them a 20% discount on the shares if you really want to sell. Otherwise don't sell. Not selling is your leverage, as they clearly want you to sell.
It doesn't sound to me like they clearly want the OP to sell. It actually sounds like the opposite. The OP wants to get out, and they responded with a lowball offer which, if anything, would motivate the OP not to sell.
Start by offering a tenth of what you would agree to pay. All you risk is that they accept your offer.
It's standard business practice. Works more often than not.
Ask the CEO whether the investors would buy your shares as part of the funding round. I've seen a company do this. It's a win for everyone. Offer a moderate discount (10-20%) to make it worth their while. - Company gets to re-concentrate their ownership among active investors/employees, and remove "dead wood" ex-founder with small stake from the cap table. This alone might make it worth their while. - Investors get s…
I would work out the difference between the salary at say Google vs what you took during your tenure at the startup then double it because of lack of upside. Aside: If the co-founder is an HN reader, then they probably know the throwaway account is you. That is going to skew this negotiation.
If that is less than 1/3rd what your shares would be worth if you sold them as part of the funding round you're not getting fair value. You have to decide whether you want fair value or not, but ~1/3rd the value of the shares in this funding round (assuming those investors got preferred shares, etc) is the low end. Investors in the round would probably buy your shares for 1/3rd - 2/3rds of their value and you should…
Ask the CEO whether the investors would buy your shares as part of the funding round. I've seen a company do this. It's a win for everyone. Offer a moderate discount (10-20%) to make it worth their while. - Company gets to re-concentrate their ownership among active investors/employees, and remove "dead wood" ex-founder with small stake from the cap table. This alone might make it worth their while. - Investors get s…
Selling existing shares does not raise money for the company. They have no more incentive to take this offer than to buy him out now.
Also, although it doesn't help the other founders that much, if one investor sells stock to another investor, it also doesn't HARM them at all.
Why should they care if two investors trade shares between each other? If you own 5%, thats what you are. An investor.
What can you buy for $100K? It's not worth thinking IMO. Keep your 5% and find a job if you need $100K cash.
[EDIT] I suggest looking at your situation from this perspective: $100,000 is a lot of money and can last you and your family over a year in certain places.
Ask the CEO whether the investors would buy your shares as part of the funding round. I've seen a company do this. It's a win for everyone. Offer a moderate discount (10-20%) to make it worth their while. - Company gets to re-concentrate their ownership among active investors/employees, and remove "dead wood" ex-founder with small stake from the cap table. This alone might make it worth their while. - Investors get s…
Selling existing shares does not raise money for the company. They have no more incentive to take this offer than to buy him out now.
Ask the CEO whether the investors would buy your shares as part of the funding round. I've seen a company do this. It's a win for everyone. Offer a moderate discount (10-20%) to make it worth their while. - Company gets to re-concentrate their ownership among active investors/employees, and remove "dead wood" ex-founder with small stake from the cap table. This alone might make it worth their while. - Investors get s…