Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Silicon Valley Venture Capitalists Prepare for an I.P.O. Wave

nytimes.com

Post reply on HN
Print view View original

21–30 of 163 posts

Re: Silicon Valley Venture Capitalists Prepare for an I.P.O. Wave

#21

Post by zapita »

baron816 wrote: post #18

Let’s say the company you work for goes public and your stock is suddenly worth $1,000,000 (as an example). A wise investor, you normally put all of your other savings into broad market index funds. Now, do you sell your company’s stock that was given to you and took you four years to vest into, or do you hold on to it and hope the valuation keeps rising? (This is a rhetorical question btw)

The short version is: retain a competent wealth manager to advise you.

EDIT: not all wealth managers are scam artists. If you suddenly earn lots of money and don't know what to do with it, find a professional paid by the hour to advise you. Do not listen to the people telling you that anyone charging you for advice is automatically a scammer. Also don't listen to people telling you that it's "not that hard" without any context on your experience and understanding of finance. They have nothing to lose by looking smart and confident on the internet while discussing your money.

It depends on your overall net worth. If the stock represents the majority of your net worth, you might want to diversify across different types of assets - your newly introduced tech stock being on the high-risk end of that spectrum. If on the other hand you have "enough" of your savings in lower-risk assets, then it can make sense to keep all your stock.

Re: Silicon Valley Venture Capitalists Prepare for an I.P.O. Wave

#22

Post by mgummelt »

jgalt212 wrote: post #17
mgummelt wrote: post #14

Earlier quoted context omitted.

Self driving cars have massive network effects, just like any product dependent on machine learning. More users -> more data -> better product -> more users. It's the same reason Google is invulnerable in web search.

More users -> more data -> better product -> more users s/b More users -> more labeled data -> better product -> more users ML systems need lots of labeled data, not just lots of data. This is one of the primary why game playing AI's have had such great successes, tons of labeled data are relatively cheap. Great discourse on this and other related issues here: https://medium.com/@karpathy/alphago-in-context-c47718cb9…

Supervised learning requires labels. Unsupervised doesn't. Self driving cars use elements of both. This is why companies like Cruise and Tesla are rushing to get basic self driving cars out there. They need driving data.

Re: Silicon Valley Venture Capitalists Prepare for an I.P.O. Wave

#23

Post by wpietri »

mgummelt wrote: post #14
asabhi wrote: post #2

There are some good and some not so good among these companies. Uber is a taxi company with an app. Cars still cost the same as before to run, drivers still cost the same as before, all costs are the same as before. So once the subsidization by VCs stops, Uber rides will be as expensive as any other ride. Self-driving cars will not save Uber either. There is no network effect with self-driving cars, and once the tech…

Self driving cars have massive network effects, just like any product dependent on machine learning. More users -> more data -> better product -> more users. It's the same reason Google is invulnerable in web search.

Google isn't invulnerable in search because of a network effect, which is about your product becoming more valuable because you connect your users to your users (e.g., the Bell System or Facebook). Google is invulnerable in search because search has a very long tail, requiring massive investment to reach adequacy for most users. Google's advantage is economy of scale.

Self-driving cars definitely don't have a network effect. They also don't have the came kind of economy of scale as Google. A person who learns to drive in one, specific part of the US is able to drive, with minor additional learning, in any part of the US. Yes, there's some minimum size necessary to get the data for self-driving cars. But unlike with search, where the minimum size is generally "the whole web", the minimum size for self-driving cars is much smaller. That's why we're seeing many different companies work on it.

Re: Silicon Valley Venture Capitalists Prepare for an I.P.O. Wave

#24

Post by mgummelt »

baron816 wrote: post #18

Let’s say the company you work for goes public and your stock is suddenly worth $1,000,000 (as an example). A wise investor, you normally put all of your other savings into broad market index funds. Now, do you sell your company’s stock that was given to you and took you four years to vest into, or do you hold on to it and hope the valuation keeps rising? (This is a rhetorical question btw)

If you had $1MM in cash, how much of it would you use to buy the company's stock?

Re: Silicon Valley Venture Capitalists Prepare for an I.P.O. Wave

#25

Post by mgummelt »

wpietri wrote: post #23
mgummelt wrote: post #14

Earlier quoted context omitted.

Self driving cars have massive network effects, just like any product dependent on machine learning. More users -> more data -> better product -> more users. It's the same reason Google is invulnerable in web search.

Google isn't invulnerable in search because of a network effect, which is about your product becoming more valuable because you connect your users to your users (e.g., the Bell System or Facebook). Google is invulnerable in search because search has a very long tail, requiring massive investment to reach adequacy for most users. Google's advantage is economy of scale . Self-driving cars definitely don't have a networ…

Network effects are not limited to products that connect users. A network effect is when more usage increases the value of the product [1]. More Google users means more click data, which means better search ranking.

But yes, Google also has scale economies.

[1] https://en.m.wikipedia.org/wiki/Network_effect

Re: Silicon Valley Venture Capitalists Prepare for an I.P.O. Wave

#26

Post by frisco »

zapita wrote: post #21
baron816 wrote: post #18

Let’s say the company you work for goes public and your stock is suddenly worth $1,000,000 (as an example). A wise investor, you normally put all of your other savings into broad market index funds. Now, do you sell your company’s stock that was given to you and took you four years to vest into, or do you hold on to it and hope the valuation keeps rising? (This is a rhetorical question btw)

The short version is: retain a competent wealth manager to advise you. EDIT: not all wealth managers are scam artists. If you suddenly earn lots of money and don't know what to do with it, find a professional paid by the hour to advise you. Do not listen to the people telling you that anyone charging you for advice is automatically a scammer. Also don't listen to people telling you that it's "not that hard" without a…

> The short version is: retain a competent wealth manager to advise you.

This is not good advice. "Wealth managers" are totally useless and exist just to charge you fees and create complexity. I really like mgummelt's comment above; it doesn't have to be more complicated than that!

Re: Silicon Valley Venture Capitalists Prepare for an I.P.O. Wave

#27

Post by wenttomarket »

Retric wrote: post #7
BurningFrog wrote: post #4

Earlier quoted context omitted.

My impression is that Uber is making money of the rides. It loses money on all its other research and investment schemes. I don't know if there are any actual facts out?

No, "Uber passengers paid only 41% of the cost of their trips for the fiscal year ended in September 2015." Prices have not changed much since then, so they are a long way from break even. https://www.reuters.com/article/us-uber-profitability/true-p...

Prices haven’t changed much in the US but Uber has divested some of its most expensive investments around the world (China, Russia, APAC).

Re: Silicon Valley Venture Capitalists Prepare for an I.P.O. Wave

#28

Post by baron816 »

mgummelt wrote: post #24
baron816 wrote: post #18

Let’s say the company you work for goes public and your stock is suddenly worth $1,000,000 (as an example). A wise investor, you normally put all of your other savings into broad market index funds. Now, do you sell your company’s stock that was given to you and took you four years to vest into, or do you hold on to it and hope the valuation keeps rising? (This is a rhetorical question btw)

If you had $1MM in cash, how much of it would you use to buy the company's stock?

Correct

Re: Silicon Valley Venture Capitalists Prepare for an I.P.O. Wave

#29

Post by YZF »

mgummelt wrote: post #24
baron816 wrote: post #18

Let’s say the company you work for goes public and your stock is suddenly worth $1,000,000 (as an example). A wise investor, you normally put all of your other savings into broad market index funds. Now, do you sell your company’s stock that was given to you and took you four years to vest into, or do you hold on to it and hope the valuation keeps rising? (This is a rhetorical question btw)

If you had $1MM in cash, how much of it would you use to buy the company's stock?

This is absolutely the right way to think about this. However if you have options the situation is different. There may also be tax considerations.

Another variable is whether your personal effort materially affects the outcome for the company. If you think your work will dramatically increase the value of the company you may want to own more stock ... presumably though if this is the case it's already reflected in your compensation (and maybe part of that is stocks/options as well).

The way I tend to think about this is that if you're working for the company you're already invested in it to some degree so from a diversification perspective I'd tend to want to own less stock of the company I work for.

Re: Silicon Valley Venture Capitalists Prepare for an I.P.O. Wave

#30

Post by mavelikara »

baron816 wrote: post #18

Let’s say the company you work for goes public and your stock is suddenly worth $1,000,000 (as an example). A wise investor, you normally put all of your other savings into broad market index funds. Now, do you sell your company’s stock that was given to you and took you four years to vest into, or do you hold on to it and hope the valuation keeps rising? (This is a rhetorical question btw)

https://blog.wealthfront.com/sell-employee-stock/
Post reply on HN