41–50 of 104 posts
I agree with the article that since startups are pass/fail, the founders must due whatever they have to do to succeed. Marc Andreesen says to even take that highly diluted fourth round to get to product/market fit and increase your chances of success. http://www.stanford.edu/class/ee204/ProductMarketFit.html
Earlier quoted context omitted.
This. Founders are better served maximizing traction at the lowest outside investment possible. If it doesn't become big, then you still hold a large chunk of a small company. And if does, then you hold a fairly large chunk of a large company.
I don't know it seems to me that Silicon Valley is littered with folks who've made a shit ton of money by founding companies and taking chunks off the table during funding rounds. Kevin Rose/Digg come to mind. This way if you become huge you still get a payday but even if it doesn't you're still a millionaire (and maybe an angel investor in companies that do become huge, Kevin Rose/Digg comes to mind).
And the average engineer who thought they'd be rich, probably owns 0.0002%. Have fun with your 200k! Startups are such a scam for the employees.
How much is that $200k after Federal income (and SS and Medicare/caid and various new obamacare taxes) and state taxes (likely California), and any other local taxes?
This sets alarm bells off for me, of the kind saying the large investors are looking to claw as much back as possible via IPO because the core business isn't as viable as they thought. Demonstrating profitable quarters in the run up to IPO is highly valuable, so if they aren't doing that . . . yuck. DropBox, for better or worse, appear to have cleaned up on the consumer front, and you'd have to be blind to not notice…
And the average engineer who thought they'd be rich, probably owns 0.0002%. Have fun with your 200k! Startups are such a scam for the employees.
I'm curious what kind of warped perspective allows someone to scoff at a $200,000 windfall and where I can acquire such a perspective.
Earlier quoted context omitted.
This. Founders are better served maximizing traction at the lowest outside investment possible. If it doesn't become big, then you still hold a large chunk of a small company. And if does, then you hold a fairly large chunk of a large company.
I don't know it seems to me that Silicon Valley is littered with folks who've made a shit ton of money by founding companies and taking chunks off the table during funding rounds. Kevin Rose/Digg come to mind. This way if you become huge you still get a payday but even if it doesn't you're still a millionaire (and maybe an angel investor in companies that do become huge, Kevin Rose/Digg comes to mind).
And the average engineer who thought they'd be rich, probably owns 0.0002%. Have fun with your 200k! Startups are such a scam for the employees.
I'm curious what kind of warped perspective allows someone to scoff at a $200,000 windfall and where I can acquire such a perspective.
Earlier quoted context omitted.
I don't know it seems to me that Silicon Valley is littered with folks who've made a shit ton of money by founding companies and taking chunks off the table during funding rounds. Kevin Rose/Digg come to mind. This way if you become huge you still get a payday but even if it doesn't you're still a millionaire (and maybe an angel investor in companies that do become huge, Kevin Rose/Digg comes to mind).
What do you mean by "taking chunks off the table during funding rounds"?
Earlier quoted context omitted.
To add to this, so what if it is "$200K" ? Basically that is enough to completely cover one kids education at a state school, put down 20% on a million dollar house, or seed fund your next "big thing" for easily 6 to 18 months. On top of that you've been working for a salary that probably paid all your existing living expenses so you were not accumulating debt. That is a pretty cool thing. Further, if you continue to…
Using an unrepeatable windfall as the down payment on a loan seems wildly inadvisable. The point of the down payment is that you're able make good on the loan.
IIRC PayPal was very similar - it was sold for $1.5B, but Max Levchin's share was only about $30M, and Elon Musk's was only about $100M. By comparison, many early Web 2.0 darlings (Del.icio.us, Blogger, Flickr) sold for only $20-40M, but their founders had only taken small seed rounds, and so the vast majority of the purchase price went to the founders. 75% of a $40M acquisition = 3% of a $1B acquisition. Something f…
edit to add: This is an interesting equation though,
> 75% of a $40M acquisition = 3% of a $1B acquisition.
In a strict sense yes, but they differ in some interesting ways. In favor of the $1B acquisition is that it's typically a much bigger deal: in terms of PR and what you're credited for, you get a lot more of it for being the founder of a $1B company than for founding a $40M company, even if your takeaway is the same in both cases. On the other hand, in the 75%-of-$40M case you are usually in a better position to control the disposition of the company, which may be important if you care about it & its product, and want to keep working on it (whereas in the 3%-of-$1B case, you generally will have to be satisfied with the cash, and wash your hands of the company). And the $40M case also probably has better odds of success.