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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?

#161

Post by ericd »

rokhayakebe wrote: post #32

Absolutely NOT. The least your shares are worth based on the lowest valuation at which they are raising is $500,000. Why take a freaking 80% discount. Keep your shares and consult with a lawyer who can ensure you are protected further down the line. PLEASE DO THIS. I will guarantee 100% that the type of people that offer you 20 cents on the dollar (as a founder) are the type of people that will screw you. 100%.

Common shares are very different from the preferred that the VCs are buying. His stock is not automatically worth 500k based on this post.

Re: Ask HN: Ex-Founder. Should I take lowball buyout offer?

#162

Post by abalashov »

toomuchtodo wrote: post #148
to3m wrote: post #136

Earlier quoted context omitted.

I dunno too. How rich do you have to be to sniff at $100K? Perhaps you'd have to know something about the US tax situation that I don't. (I'm in the UK, so what do I know.) Maybe you end up with $10K in your pocket afterwards, or something, so it's kind of barely worth it, comparatively speaking.

Even at the highest marginal tax rate, you walk away with about $60k after tax.

And a $60k lump sum would not be refused, either.

Re: Ask HN: Ex-Founder. Should I take lowball buyout offer?

#163

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Re: Ask HN: Ex-Founder. Should I take lowball buyout offer?

#165

Post by fzzzy »

throwaway21122 wrote: post #93
johnchristopher wrote: post #34

Earlier quoted context omitted.

Might also be the other party testing the waters. edit: of course, parent's comment regarding the other party is still sound and valid :).

lol, it is. for the record, i'd probably do it if i was offered $500k.

Then ask for 500k.

Re: Ask HN: Ex-Founder. Should I take lowball buyout offer?

#167

Post by pm24601 »

You believe that the future of the company is poor.

You are willing to sell.

Scenario #1: Company goes out of business

Lets say you are completely right.

$100K in 2017's dollars > $0 in the future.

Verdict: Sell

Scenario #2: Company struggles/downrounds/etc

Your stock is diluted.

$100K in 2017's dollars > $100K (or less) in 20xx dollars.

Verdict: Sell

Scenario #3: Company is moderately more successful than expected

$100K in 2017's dollars ==(approximately) $150K in 2020 dollars

Verdict: Sell

Scenario #4: You are completely wrong

$100K in 2017's dollars --------------------------

You left the company for a reason. Has any of those reasons changed?

Maybe sell part and keep part to reduce regret possibilities?

Question: What number will you be emotionally o.k. with no matter the result?

Re: Ask HN: Ex-Founder. Should I take lowball buyout offer?

#168

Post by darawk »

abalashov wrote: post #102
darawk wrote: post #75

Earlier quoted context omitted.

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…

I dunno. $100k as a lump sum, here, in cash, now would solve a lot of serious financial problems in my life that $100k over 12 months doesn't even move the needle on. Some problems in life require lump sums. Cash is king.

Sorry, I didn't mean to imply that it was not a large sum. It's a large sum for me too. But it's not a totally life changing one. You couldn't quit your job if you got 100k.

Re: Ask HN: Ex-Founder. Should I take lowball buyout offer?

#169

Post by darawk »

Confusion wrote: post #159
darawk wrote: post #75

Earlier quoted context omitted.

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…

Not for most people here, though I doubt you have any data to back that 'most' up. There are a lot of people reading here and many of them are not like yourself.

It's a lot of money for me. But most people here are software developers, and i'd say most of them are living in Western countries. That means the mean salary here is going to be at least 60k. Which means 100k is only about 1.5 years of salary. Is that a lot of money? Yes. Is it completely life changing? No.

Re: Ask HN: Ex-Founder. Should I take lowball buyout offer?

#170

Post by darawk »

to3m wrote: post #136
abalashov wrote: post #102

Earlier quoted context omitted.

I dunno. $100k as a lump sum, here, in cash, now would solve a lot of serious financial problems in my life that $100k over 12 months doesn't even move the needle on. Some problems in life require lump sums. Cash is king.

I dunno too. How rich do you have to be to sniff at $100K? Perhaps you'd have to know something about the US tax situation that I don't. (I'm in the UK, so what do I know.) Maybe you end up with $10K in your pocket afterwards, or something, so it's kind of barely worth it, comparatively speaking.

I'm not saying it's something to sniff at. It's just not completely life changing. Even if you're only making a 60k/year salary, 100k is only ~1.5 years of salary. A lot of money? Yes. But not quit your job money, change your life money.
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