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I'd be curious to know what percentage of founders are taking money off the table during these rounds. For as many of these articles that I read I don't see muc

I'd be curious to know what percentage of founders are taking money off the table during these rounds. For as many of these articles that I read I don't see much about that. De-risking their personal stake by 3-10M could be a motivating force in these high valuation rounds but I don't see evidence either way. Because on its face these unicorn rounds seem to increase risk rather than reduce it in a few dimensions.

fweespeech 11y ago
It could be but my guess is its just a question of the money tap flowing freely so there is more competition on the VC side. VC's set the prices after all.
beachstartup 11y ago
i wouldn't ever take investment money without personally benefitting from it. after working my ass off for 6+ years, the thought of giving a portion of my company away without money in pocket seems patently absurd. like, a total non-starter. nope. i would laugh in the face of anyone who offered. anyone who tells you otherwise is probably trying to fool you -- that happens a lot when you own a business. if i were a vc, i'd also want my entrepreneurs to take some money so they can focus on more important things. the executive team of a funded company with real employees and real expectations of not pissing away a small fortune and many careers should not be worried about personal money at all. they should have enough disposable income to get all their personal luxury crap like laundry service and car rides, fancy gym memberships and whatnot taken care of. supporting a family? then it's even more important because it relieves the stress of multiple people which would have been the executives' to bear. plus, a pissed off founder that got ejected from their own company after years of work and no compensation..... not a recipe for good things. in fact it's a recipe for very, very bad things.
- mgkimsal 11y ago
  > a pissed off founder that got ejected from their own company after years of work and no compensation..... not a recipe for good things. in fact it's a recipe for very, very bad things. Such as…? If they weren't compensated, and don't have money, how much damage can they do?
  - tomjen3 11y ago
    They would have very inside knowledge of the problem space and complete control of the company.
    - mgkimsal 11y ago
      How would they have complete control if they were ejected? If you're talking about control of another company, I'd imagine there'd be some time period of non-compete, and trouble finding new investment (assuming investment was needed).
      - toomuchtodo 11y ago
        You can be kicked out of your company without losing your equity. I believe Silicon Valley even has its next season's story arc revolve around this.
      - yo-code-sucks 11y ago
        Non-compete? Good luck holding that up in A California court.
downandout 11y ago
It's exceedingly rare for founders to be allowed to take money off the table during these large rounds. According to leaked emails from Sony, investors balked when Evan Spiegel of Snapchat tried to unload $40M in personal shares - just after he had turned down a $3B offer from Facebook. The founder of Twitch wanted to take some money off the table at a ~$200M valuation nine months before it was sold to Amazon for $970M, and he was also rejected [1]. If they aren't giving cash to founders of companies like Snapchat and Twitch, there likely aren't a whole lot of other people that are getting it either. [1] http://justinkan.com/the-99-percent http://justinkan.com/the-99-percent
- rdlecler1 11y ago
  I think sama mentioned that it's now more common for founder to take some money off the table starting at their B round. It makes sense, you don't that the entrepreneur focused on their money problems. A little financial can go a long way with your family.

fweespeech 11y ago

It could be but my guess is its just a question of the money tap flowing freely so there is more competition on the VC side. VC's set the prices after all.

beachstartup 11y ago

i wouldn't ever take investment money without personally benefitting from it. after working my ass off for 6+ years, the thought of giving a portion of my company away without money in pocket seems patently absurd. like, a total non-starter. nope. i would laugh in the face of anyone who offered. anyone who tells you otherwise is probably trying to fool you -- that happens a lot when you own a business. if i were a vc, i'd also want my entrepreneurs to take some money so they can focus on more important things. the executive team of a funded company with real employees and real expectations of not pissing away a small fortune and many careers should not be worried about personal money at all. they should have enough disposable income to get all their personal luxury crap like laundry service and car rides, fancy gym memberships and whatnot taken care of. supporting a family? then it's even more important because it relieves the stress of multiple people which would have been the executives' to bear. plus, a pissed off founder that got ejected from their own company after years of work and no compensation..... not a recipe for good things. in fact it's a recipe for very, very bad things.

mgkimsal 11y ago
> a pissed off founder that got ejected from their own company after years of work and no compensation..... not a recipe for good things. in fact it's a recipe for very, very bad things. Such as…? If they weren't compensated, and don't have money, how much damage can they do?
- tomjen3 11y ago
  They would have very inside knowledge of the problem space and complete control of the company.
  - mgkimsal 11y ago
    How would they have complete control if they were ejected? If you're talking about control of another company, I'd imagine there'd be some time period of non-compete, and trouble finding new investment (assuming investment was needed).
    - toomuchtodo 11y ago
      You can be kicked out of your company without losing your equity. I believe Silicon Valley even has its next season's story arc revolve around this.
    - yo-code-sucks 11y ago
      Non-compete? Good luck holding that up in A California court.

downandout 11y ago

It's exceedingly rare for founders to be allowed to take money off the table during these large rounds. According to leaked emails from Sony, investors balked when Evan Spiegel of Snapchat tried to unload $40M in personal shares - just after he had turned down a $3B offer from Facebook. The founder of Twitch wanted to take some money off the table at a ~$200M valuation nine months before it was sold to Amazon for $970M, and he was also rejected [1]. If they aren't giving cash to founders of companies like Snapchat and Twitch, there likely aren't a whole lot of other people that are getting it either. [1] http://justinkan.com/the-99-percent http://justinkan.com/the-99-percent

rdlecler1 11y ago
I think sama mentioned that it's now more common for founder to take some money off the table starting at their B round. It makes sense, you don't that the entrepreneur focused on their money problems. A little financial can go a long way with your family.