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I'd have a very hard time turning down anything over $10m at any age. Even if I thought my product might be worth billions.

mulletbum 10y ago
Even if you don't think specifically about how much money it is, you basically could fund any idea you ever want to do for the rest of your life. Instead you get to have one idea that your stuck with whether or not it makes 100k even.
- johnward 10y ago
  At $1m I might think twice. It may not be enough for me to live on for another 50 years. At $10m I could probably try all kinds of new ideas and still have enough money to live if they all failed.
  - mulletbum 10y ago
    If you weren't a serial entrepreneur I think $1m is more than enough to invest and live off of for almost all your life.
    - xapata 10y ago
      Depends where you want to live and what kinds of things you want to eat. And how much risk you are comfortable with. My desired lifestyle requires $5 million to retire comfortably.
    - throwawayReply 10y ago
      At 2% return a million is 20k/yr. That's nice but not "set you for life" nice.
    - CydeWeys 10y ago
      It's not. At a conservative safe withdrawal rate of 4% you'l only be living off $40K per year. And that 4% figure is safe but not bulletproof; a lot of people go lower. Most people who plan on retiring early are working on banking multiple millions. See /r/financialindependence for details.
      - maccard 10y ago
        Worth noting that $40k is greater than the median income in the UK, so this would be enough for an awful lot of people.
        johnward 10y ago
        The US is about $52K for a household. $40k would probably be enough for a lot of people. That's at 4% return on $1m. Where are people getting that consistently and without too much risk of losing a bunch of that money? Then how to you keep up with inflation? In my mind I would still risk it at $1m because $40k isn't enough for me to live the kind of lifestyle I would want to live and ensure I could do it until I die.
        mulletbum 10y ago
        but at 14 you could still do other things. It isn't like they give you $1M and say you can never make money ever again.
        CydeWeys 10y ago
        4% is the withdrawal rate, not the return rate. You want the return rate to be higher, ideally at around 7% real returns. You accomplish that by investing most of it in the stock market. You have to withdraw less than the return rate in order to manage risk so that you survive periods of bad returns.
      - mulletbum 10y ago
        40k would get you a nice house and a decent living for the rest of your life in my State/Country. On top of that you could still work, so this math is already suspect depending on your needs.
    - deleted 10y ago
      [deleted]
- randomgyatwork 10y ago
  Whats to say the idea they would be stuck with wasn't there favorite, number 1 idea?
  - mulletbum 10y ago
    At 14, I barely could decipher if I enjoyed playing video games more than masturbating. I doubt a 14 year old knows anything about life long dreams.
- joshmanders 10y ago
  > Instead you get to have one idea that your stuck with whether or not it makes 100k even. Six Flags ordered 100 machines putting him at 550,000 revenue for a single customer. As more momentum picks up and they pull in more customers, he'll be well over 30m revenue in a few years time. Smart move from this kid. Bill Gates didn't get his wealth by selling out at the first offer, regardless of his age.
  - mulletbum 10y ago
    "As more momentum picks up" This is the crux of what is being discussed, as with the risks involved in that.
  - mywittyname 10y ago
    There's nothing unique about his business. He's providing a commodity service that hundreds of people will replicate in short-order. I think taking the money and using it to fund another business in a few years is the best course of action.
slap_shot 10y ago
Agreed. I think an interesting expose of this is Drew Houston's YC application where I believe he says he'd be okay with selling for $1M at that time (about a year's worth of work). I'm sure he had buyouts for $10M shortly after YC.
gabemart 10y ago
I'm pretty sure this is the rational, utility-maximising preference for anyone who isn't already a multi-millionaire. The diminishing marginal utility of wealth means that $1 billion generates way, way less than 100x as much utility as $10 million for the vast majority of people. And if you need another reason (I wouldn't), there's the time aspect as well - how much is $1 billion in ten years time worth today? A lot less than $1 billion to me.

mulletbum 10y ago

Even if you don't think specifically about how much money it is, you basically could fund any idea you ever want to do for the rest of your life. Instead you get to have one idea that your stuck with whether or not it makes 100k even.

johnward 10y ago
At $1m I might think twice. It may not be enough for me to live on for another 50 years. At $10m I could probably try all kinds of new ideas and still have enough money to live if they all failed.
- mulletbum 10y ago
  If you weren't a serial entrepreneur I think $1m is more than enough to invest and live off of for almost all your life.
  - xapata 10y ago
    Depends where you want to live and what kinds of things you want to eat. And how much risk you are comfortable with. My desired lifestyle requires $5 million to retire comfortably.
  - throwawayReply 10y ago
    At 2% return a million is 20k/yr. That's nice but not "set you for life" nice.
  - CydeWeys 10y ago
    It's not. At a conservative safe withdrawal rate of 4% you'l only be living off $40K per year. And that 4% figure is safe but not bulletproof; a lot of people go lower. Most people who plan on retiring early are working on banking multiple millions. See /r/financialindependence for details.
    - maccard 10y ago
      Worth noting that $40k is greater than the median income in the UK, so this would be enough for an awful lot of people.
      - johnward 10y ago
        The US is about $52K for a household. $40k would probably be enough for a lot of people. That's at 4% return on $1m. Where are people getting that consistently and without too much risk of losing a bunch of that money? Then how to you keep up with inflation? In my mind I would still risk it at $1m because $40k isn't enough for me to live the kind of lifestyle I would want to live and ensure I could do it until I die.
        mulletbum 10y ago
        but at 14 you could still do other things. It isn't like they give you $1M and say you can never make money ever again.
        CydeWeys 10y ago
        4% is the withdrawal rate, not the return rate. You want the return rate to be higher, ideally at around 7% real returns. You accomplish that by investing most of it in the stock market. You have to withdraw less than the return rate in order to manage risk so that you survive periods of bad returns.
    - mulletbum 10y ago
      40k would get you a nice house and a decent living for the rest of your life in my State/Country. On top of that you could still work, so this math is already suspect depending on your needs.
  - deleted 10y ago
    [deleted]
randomgyatwork 10y ago
Whats to say the idea they would be stuck with wasn't there favorite, number 1 idea?
- mulletbum 10y ago
  At 14, I barely could decipher if I enjoyed playing video games more than masturbating. I doubt a 14 year old knows anything about life long dreams.
joshmanders 10y ago
> Instead you get to have one idea that your stuck with whether or not it makes 100k even. Six Flags ordered 100 machines putting him at 550,000 revenue for a single customer. As more momentum picks up and they pull in more customers, he'll be well over 30m revenue in a few years time. Smart move from this kid. Bill Gates didn't get his wealth by selling out at the first offer, regardless of his age.
- mulletbum 10y ago
  "As more momentum picks up" This is the crux of what is being discussed, as with the risks involved in that.
- mywittyname 10y ago
  There's nothing unique about his business. He's providing a commodity service that hundreds of people will replicate in short-order. I think taking the money and using it to fund another business in a few years is the best course of action.

slap_shot 10y ago

Agreed. I think an interesting expose of this is Drew Houston's YC application where I believe he says he'd be okay with selling for $1M at that time (about a year's worth of work). I'm sure he had buyouts for $10M shortly after YC.

gabemart 10y ago

I'm pretty sure this is the rational, utility-maximising preference for anyone who isn't already a multi-millionaire. The diminishing marginal utility of wealth means that $1 billion generates way, way less than 100x as much utility as $10 million for the vast majority of people. And if you need another reason (I wouldn't), there's the time aspect as well - how much is $1 billion in ten years time worth today? A lot less than $1 billion to me.