What can you buy for $100K? It's not worth thinking IMO. Keep your 5% and find a job if you need $100K cash.
A house?
Ask HN: Ex-Founder. Should I take lowball buyout offer?
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Re: Ask HN: Ex-Founder. Should I take lowball buyout offer?
#72If 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…
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Re: Ask HN: Ex-Founder. Should I take lowball buyout offer?
#73Is the CEO lowballing you because your relationship is adversarial?
If so, you will likely need to break through that emotional barrier to get his cooperation in selling the shares to investors. Assuming his cooperation will make it easier.
Re: Ask HN: Ex-Founder. Should I take lowball buyout offer?
#74I 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.
I believe this is a sunk cost fallacy. The present value of the shares not based on the OP's previous foregone financial opportunities.
Agree with this. What the OP could have made at Google is not his CEOs problem.
Re: Ask HN: Ex-Founder. Should I take lowball buyout offer?
#75Personally, I'd keep the equity. Would $100K really do much for you in the long term?
$100k is life changing money for most people.
Not for most people here, though. Do we really need to keep saying stuff like this every time anyone here mentions money? "$10 is a weeks worth of food for people in Africa, you know". $100k is a lot of money, no question. But it's only about 1-year's salary for a decently paid programmer. It's not enough to quit your job, and it's not even enough to buy a house in most major tech cities. Which is what the OP said "would it really do much for you in the long term?"
Re: Ask HN: Ex-Founder. Should I take lowball buyout offer?
#76Set up a divesting schedule with regular payments based on the valuation of the company. The longer you're gone the less you have. If you've done work to get the company where it is then it's fair. I would not take a lump some in most cases.
Assuming the CEO is lowballing to conserve cash, this is a great idea.
Re: Ask HN: Ex-Founder. Should I take lowball buyout offer?
#77Presumably, someone values your 5% higher than that, based on your characterization of the valuation. People that know better than me: How nuclear an option would it be to ask the investors directly?
The investors will probably only do it if the CEO is on board. Assuming they value relationship with CEO
Re: Ask HN: Ex-Founder. Should I take lowball buyout offer?
#78Earlier quoted context omitted.
$100k is life changing money for most people.
Not for most people here, though. Do we really need to keep saying stuff like this every time anyone here mentions money? "$10 is a weeks worth of food for people in Africa, you know". $100k is a lot of money, no question. But it's only about 1-year's salary for a decently paid programmer. It's not enough to quit your job, and it's not even enough to buy a house in most major tech cities. Which is what the OP said "w…
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Re: Ask HN: Ex-Founder. Should I take lowball buyout offer?
#79Don't sell. If they are about to raise, then this is the perfect time to sell your shares to investors in the secondary market.
If you offer your stake at any discount, they are irrational if they don't take it. Don't worry if you are bound to a non transfer-ability clause. Getting around that is always possible with a bit of lawyering.
Also get someone else to handle the transaction on your behalf. You don't sound like the best negotiator. No offense intended.
Re: Ask HN: Ex-Founder. Should I take lowball buyout offer?
#80Earlier quoted context omitted.
This. Ex-employees appearing out of the woodwork just before a funding round and wanting to divest all of their shares is definitely a scenario which (best case) gives the investors an extra weapon with which to put pressure on the valuation/terms of the deal and (worst case) could even get the deal called off completely. Even if you're not on great terms with your ex-cofounders, think of your ex-employees (and your…
That's not the worst case. The worst case is where the other shareholders sue you for damaging the company.
Maybe I am not just into that area, but how can you win such a suit, by that logic you could sue anybody who short sells a company...