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> and wait a couple years for your equity to be valuable Product-market fit does not imply appreciation. Growth is priced in. Unless you think you know more
by mgummelt 9y ago
> and wait a couple years for your equity to be valuable
Product-market fit does not imply appreciation. Growth is priced in. Unless you think you know more than the market (the VCs), you shouldn't expect a return.
- austenallred 9y agoProduct market fit and further growth are generally pretty correlated, though
- mgummelt 9y agoYes, but growth and appreciation are (theoretically) not. Growth is priced in. You're saying product-market fit -> growth -> appreciation. The first part of that is true. The second isn't. Assuming market efficiency, the VCs know just as well as I do that the company is going to grow, so they'll pay a higher rate, which means my options will be priced higher (or I'll get fewer RSUs, accordingly). Growth does not imply appreciation.
- austenallred 9y agoAssuming market efficiency at series B is quite a leap, IMO. That said, let's roll with that assumption; you need to find a company that continues to grow, or in some other way derisks itself.
- mgummelt 9y agoThis is like saying "To make money in the stock market, you have to find stocks that will go up." It's tautological.