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FounderPool: A community for founders to share risk and diversify their equity

founderpools.com

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Re: FounderPool: A community for founders to share risk and diversify their equity

#181

Post by csentropy »

forgotmysn wrote: post #142
csentropy wrote: post #135

Earlier quoted context omitted.

I've heard that some YC founders approached them about it, but the management of this structure may be more work that distracts YC from it's focus. We hope every accelerator and VC film does this eventually, we want to power as many of them as we can under the hood.

lol im sure you do, as does pando. and ya, that makes sense. it should be offered by YC and other accelerators, but it should be managed by alumni and pool members, not by the investing party. edit: a word

If they want to take it upon themselves, they should.

Having said that, there is a reason coop pools like insurance are managed by third parties.

Re: FounderPool: A community for founders to share risk and diversify their equity

#182

Post by smabie »

tqi wrote: post #57

This sounds similar to Pando [1], which is doing income pooling for professional baseball players [2]: "Nobody has to pay a cent until they've made it to the majors and they've made $1.6 million. Then that guy has to kick 10% of his salary back to his pool mates." [1] https://www.pandopooling.com/baseball [2] https://www.npr.org/2019/10/25/773532516/some-baseball-playe...

Poker players to much the same thing and trade percent stakes before tournaments. And once again, modern portfolio theory triumphs!

Re: FounderPool: A community for founders to share risk and diversify their equity

#185

Post by ttul »

tonystubblebine wrote: post #79

As you get older without an exit, you start to freak out a bit about your retirement. At least that was true for me. I'm 1000x better as an entrepreneur at age 42 than I was at age 27. But I'm also 100x more worried about some basic financial things like whether I will be able to retire, maintaining a mortgage, keep up financially with my spouse's career and her changing life expectations. And what helped stabilize m…

LoL this is me, without the hit. Two decades in and no liquidity. But soooo much scar tissue.

Re: FounderPool: A community for founders to share risk and diversify their equity

#186

Post by kirso »

ttul wrote: post #185
tonystubblebine wrote: post #79

As you get older without an exit, you start to freak out a bit about your retirement. At least that was true for me. I'm 1000x better as an entrepreneur at age 42 than I was at age 27. But I'm also 100x more worried about some basic financial things like whether I will be able to retire, maintaining a mortgage, keep up financially with my spouse's career and her changing life expectations. And what helped stabilize m…

LoL this is me, without the hit. Two decades in and no liquidity. But soooo much scar tissue.

Welcome to the reality of survivorship bias... At least we are talking REAL life decisions, the interesting part is that its probably the majority of people, still no liquidity after years of work. On a bright side, its going to be fine but next time we will all think twice regarding the trade-offs.

Re: FounderPool: A community for founders to share risk and diversify their equity

#187

Post by est31 »

m0zg wrote: post #145
tonystubblebine wrote: post #79

As you get older without an exit, you start to freak out a bit about your retirement. At least that was true for me. I'm 1000x better as an entrepreneur at age 42 than I was at age 27. But I'm also 100x more worried about some basic financial things like whether I will be able to retire, maintaining a mortgage, keep up financially with my spouse's career and her changing life expectations. And what helped stabilize m…

> A 0.1% equity stake in a startup that ends up hitting is life changing. For the vast majority of startups, "hitting" is $100-200M acquihire. 0.1% of that is only 200K. If you can get in on something like Beyond Meat, sure, but that's the kind of a company which won't be a part of something like this. Speaking from the other end of this spectrum, BTW, my risk tolerance is higher now than it's ever been. I don't have…

> "hitting" is $100-200M acquihire. 0.1% of that is only 200K.

Note that there are liquidation preferences so it's usually not as simple as that. If 100M had been invested at 1x liquidation preference, investors hold 33% and the startup is sold for 150M, then they'd only get 50M from their shares so they'll likely execute their right to get their investment back (at the expense of their shares, let's assume the deal includes this). So the 100M gets distributed among the investors and the 50M gets distributed among the remaining shareholders who hold the other 66%. For a 0.1% shareholder from that group this would mean a 75k payout instead of 150k that your calculation would give.

Re: FounderPool: A community for founders to share risk and diversify their equity

#188

Post by bananaface »

csentropy wrote: post #129
bananaface wrote: post #99

Earlier quoted context omitted.

How do you legally kick them out?

Because of the condition for participation in the pool is that your stock should continue to vest, for the membership shares in the pool to continue to vest.

Wait so your startup has to continue to grow in order for you to be able to claim profits from the pool? Doesn't that defeat the purpose?

Re: FounderPool: A community for founders to share risk and diversify their equity

#189

Post by danieltillett »

geoburke wrote: post #174
imlina wrote: post #140

Most likely will see a lot of lifestyle business founders, unlikely to find companies that will blitzscale and go on to become unicorns in this lot.

Why?

Adverse selection.

Re: FounderPool: A community for founders to share risk and diversify their equity

#190

Post by imtringued »

mauriziocalo wrote: post #138

Have you actually modeled out the potential payouts? How did you choose the 1% number (percent of their equity that each founder contributes) as well as the pool size of My quick back-of-the-envelope calculation: Expected payout to each member would be: 1% * avg_valuation_of_companies_in_pool * avg_percent_ownership_at_exit Assuming an average valuation (in the literal sense, total exit value of all co's in the pool…

Why would ownership at exit matter? If the founder only has 15% ownership then he will still have to give up 1% not 0.15% of total equity. This means the founder will be left with 14% equity.
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