131–140 of 238 posts
If you didn’t become a unicorn, but have a steady income, is it possible to buy out equity?
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>However YC gets preferential shares; It's not that YC specifically gets "preferred shares" -- it's that investors in general insist on liquidation preferences when buying non-liquid shares in unproven private companies. How would an alternative scenario of investors buying common shares of illiquid stock in a private company actually be realistic? Maybe the startup founders could hypothetically insist on selling onl…
Why is the risk being taken by investors greater than the one being taken by employees and founders? If anything, employees are taking a greater risk because you can replace money far more easily than years of your life.
If you can find money that doesn't insist on preferred liquidation, good on you. But those with the money tend to have a lot of say on giving it away.
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I worked at a startup where the founders were your age and paid themselves that much while holding their majority stake in stock. We had open salary bands so we were all paid OK - especially our couple ~entry level folks at $100-120k. It was strange times in my eyes, though. They hired an HR person whose first act was to raise the c-suite salaries to market rate ($200k+) while the business still had negligible income…
What a sweet position to be in. All the upside of the potential stock valuation windfall while none of the downside of putting your career and income on the line.
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So ... is a restaurant considered a small business? Where do you draw the line on initial investment?
What kind of restaurant takes tens of millions to start? Most estimates I'm aware of are less than 1 or 2 million at the very most.
I'm onehundertpercent pissed off with YC: * The modal win for a founder is $0.00 * PG makes big talk about winner's average returns... Yayyyyy..... However YC gets preferential shares; YC is not aligned with the common shareholders (founders; builders). YC builds a story that they support creators however YC doesn't sit on the same table-side as creators. * I actually believe YC is worthwhile, but I wonder if Ize jus…
>However YC gets preferential shares; It's not that YC specifically gets "preferred shares" -- it's that investors in general insist on liquidation preferences when buying non-liquid shares in unproven private companies. How would an alternative scenario of investors buying common shares of illiquid stock in a private company actually be realistic? Maybe the startup founders could hypothetically insist on selling onl…
YC famously claims it is not a VC fund because it invests their own money, they wouldn’t have this problem.
There are not just startups that become unicorns and startups that fold. Investors' worst nightmare is if you just make enough money to keep going, but you don't grow ("lifestyle business" as they use it is a derogatory term). That's because they prefer a sudden death where they can write down the investment and deduct their loss from taxes than an investment where they never see any money again. And then there are "…
Nothing stops them from selling you back their share at close to zero if they really want to right it off.
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They pay themselves 200k/y in a pre-market fit startup? That's insane and I guess on the investors for going over the traditional preseed amounts. Or do you mean that they're zombie startups that make enough to pay the founder 200k/year?
I think a lot of gen z founders see nothing wrong with paying themselves a FAANG salary. My generation, not so much (I’m 45).