41–50 of 72 posts
Slightly off-topic, but which trade platforms are trustworthy for buying stocks in pre-IPO companies? I see in this post that SharesPost appears to be legit. Any others? Also curious to hear if anyone managed to make such a purchase in a US pre-IPO company without being US-based.
I'd be curious to know how much of an outcome a full-stack engineer at Facebook must have had in order to angel invest 400k a year and still have that be a fraction of their portfolio.
I'd be curious to know how much of an outcome a full-stack engineer at Facebook must have had in order to angel invest 400k a year and still have that be a fraction of their portfolio.
This is a pretty normal outcome for anyone at the FAANGs who stayed through at least one full vesting cycle and had the good sense to hold their RSUs for a decade after instead of cashing them out on vest.
Earlier quoted context omitted.
> From the post: "When you invest in a startup, the money directly goes to the economy to build up a business, to create jobs and to actually contribute to the trickle down economy." and this is completely wrong. The money public investors pay to exiting shareholders do play a major role in the economy - it enables the early, IPO/angel investors to exit, and allows them to convert capital locked in the established st…
> The money public investors pay to exiting shareholders do play a major role in the economy - it enables the early, IPO/angel investors to exit, and allows them to convert capital locked in the established startups to new startups, without waiting to "cash-out" using the company's profits (which may be years away). Sure, this is true. But there aren't any early investors in Exxon (for example) cashing out this way.
The process is continuous, until the day Exxon dies or closes shop. The chain of "cashing out" needs to be maintained for the chain to even exist in the first place.
If there were no "secondary" investors, then the only way for an initial investor to reap their returns is via the profits generated, which can be many many years away.
But these "secondary" investors are in the same position - they may want to only invest for a set interval of time. So they have to "cash out" by selling to "tertiary" investors. And so on.
And as a company becomes more mature, their expected returns are more certain, and also lower (i.e., lower risk). So the tertiary investors are people who don't want to take high risks, and want a steady stream of income.
The problem i have with a lot of people's misconception is that they think that buying/selling shares are useless activities, and does not benefit the overall economy.
I disagree on the choice of benchmarks as they're not really comparable. A more comparable benchmark for angel investments in Internet / SW startups would be a broad-based ETF that covers those. Picking a couple of the larger ones, I looked at the same periods (2012-2019 and 2016-2019) for each of them: FDN: 4.31x / 1.86x IGV: 4.41x / 2.27x overall mean: 3.2x Not much different than QQQ's 3.04x, but SPY is not a good…
That and anybody with ~$1000 can buy into an ETF. Angel investing not only requires more capital but social connections and the prestige of something like a big Facebook exit. There are some funds and things like Forge Global where you can get access without a nice headshot, but otherwise you have to play golf with the founders and/or other investors.
So the SPY/QQQ benchmark does not realistically model the opportunity cost. It's not like angel investing is another tab in the Vanguard fund list where you can see where $10,000 will take you. Angel investing requires you to adopt a lifestyle.
I disagree on the choice of benchmarks as they're not really comparable. A more comparable benchmark for angel investments in Internet / SW startups would be a broad-based ETF that covers those. Picking a couple of the larger ones, I looked at the same periods (2012-2019 and 2016-2019) for each of them: FDN: 4.31x / 1.86x IGV: 4.41x / 2.27x overall mean: 3.2x Not much different than QQQ's 3.04x, but SPY is not a good…
So even if an average angel investor produces higher average returns than SPY, they might still have a lower Sharpe ratio, meaning the angel is taking on much more risk for only slightly higher returns.
For most investors it's hard to beat a broad market ETF for risk-adjusted returns.
(Matterport was listed as an investment. Also, no longer across from the original YC location anymore. :(( )
I'd be curious to know how much of an outcome a full-stack engineer at Facebook must have had in order to angel invest 400k a year and still have that be a fraction of their portfolio.
Slightly off-topic, but which trade platforms are trustworthy for buying stocks in pre-IPO companies? I see in this post that SharesPost appears to be legit. Any others? Also curious to hear if anyone managed to make such a purchase in a US pre-IPO company without being US-based.
I'd be curious to know how much of an outcome a full-stack engineer at Facebook must have had in order to angel invest 400k a year and still have that be a fraction of their portfolio.
This is a pretty normal outcome for anyone at the FAANGs who stayed through at least one full vesting cycle and had the good sense to hold their RSUs for a decade after instead of cashing them out on vest.
Hindsight is 20/20...