Fuck you, Money
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Fuck you, Money
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Re: Fuck you, Money
#2Very good, well written article.
Can someone with a wide breadth of experience like pg comment on whether the equation of rapacious greed with likelihood of getting fuck-you money out of the startup game is actually correct empirically?
Re: Fuck you, Money
#3I'm not sure how typical the angel quote is, most angels would be happy as long as the founders were happy with a buy-out.
An exit of 15 million which yields $500K to the investor after putting up $100K means that the angel only holds about 3% of the company anyway.
Also, as a rule you don't blog or write about your verbal agreement, you wait until the agreement is in writing and the money is in the bank and you've agreed with your investors that you can go public with the news.
Some people will back out of a deal if you go public like this, even if they're not mentioned by name.
A deal isn't done until the money is in the bank.
And essentially he write that he told the guy just what he thought he wanted to hear, and now blogs that he is baffled by this and and that he didn't tell him the truth.
Let's hope that said 'angel' doesn't read that blog.
Re: Fuck you, Money
#4The phrase is a disgrace to the idea it conveys.
Re: Fuck you, Money
#5The company valuation he’d get in on would mean that such an acquisition would represent a 5x return, over something like three months. That’s a gargantuan return on an annualized basis.
You're totally missing the part where angels invest in companies that give them zero return. Even the worst stocks give you some money back. Unfair comparison.
Re: Fuck you, Money
#6the reality is you’re doomed if you’re even asking yourself the question. You know what I think? I think people who tell themselves ‘if I make $X million, then I’ll stop working and do what I want’ never make that $X million.
I'm not sure the OP has grasped the complete psychology of FU money. Surely the value of FU money is not to allow one to stop working, it is in the emotional pay-off for the security it represents. This is a big deal, especially for people who, for example, experienced financial insecurity as children. I am guessing there are also tangible social benefits to reaching that stage, even if you changed nothing in your life upon achieving it.
Re: Fuck you, Money
#7I think people who tell themselves ‘if I make $X million, then I’ll stop working and do what I want’ never make that $X million.
If that's the case, then why do so many start-ups sell to bigger companies? Every month we hear about another one. The "swing for the fences" companies that go through to IPO (Facebook, Google) or massive acquisition (Youtube) are more and more rare.
The Angel's question is meaningless unless you also know how optimistic you are about the company's chances of growing enough to deserve a much better deal.
Re: Fuck you, Money
#8To answer the authors question. Absolutely sell out, if your first success buys you the freedom to fail a thousand more times it is worth selling. He said those that would sell out are those that don't already have FU money, that they aren't in the club. Those founders that hold out might already have that FU money and are free to risk holding out. Each founder in those cases can't be compared.
A man asked me to follow him into a startup I didn't believe in, he could go in and fail completely and come out the other side without a scratch because of his previous success. The risk was too high for me because I didn't already have FU money to cushion a complete failure.
Re: Fuck you, Money
#9Interestingly I find a similar drive within myself. Many years ago I told myself I'd start a business when I had $10k in hand. Then it became $20k, then $50k, then $100k, now it's more...
Of course I realize that there's no good time to leave a good job -- just like there's no good time to have a baby. It's a moving target -- and if you want to do something, you just have to jump the nest and do it.
Because our minds work on a relative basis ("I make good money but he makes more") and because our dopamine payoff from money is never as good as we anticipate it to be ("no, winning the lottery will not make you happier"), it makes sense that more is never enough.
Re: Fuck you, Money
#10"Before anything else, let’s do the numbers: money market funds yield around 4%."
What? The Vanguard Prime Money Market Fund (VMMXX) is yielding about 0.13% right now, and I think that's fairly typical.