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...as long as you are paying yourself a hefty salary. Your equity dilutes quickly when you raise a lot of money, and liquidation preferences can leave you with
by ynniv 9y ago
...as long as you are paying yourself a hefty salary. Your equity dilutes quickly when you raise a lot of money, and liquidation preferences can leave you with nothing unless you actually make a wildly profitable company.
- cjalmeida 9y agoThat's always the case nowadays, huh? I think the days of startups CEO earning engineer level salaries and flying coach are long gone - at least for VC funded companies.
- Retric 9y agoFounders are no longer forced to wait for IPO before selling shares. And after you get an X0 million dollar check who cares if you own 1% of what's left.
- ynniv 9y agoThis is news to me. Has it been reported anywhere?
- Retric 9y agoIt's called 'taking money off the table' and it's very common. EX: We knew that in Groupon's past two financing rounds, founders had taken money off the table. http://www.businessinsider.com/groupon-ipo-insider-selling-2011-6 http://www.businessinsider.com/groupon-ipo-insider-selling-2... Companies need to be huge before this before founders get's into the 10+ million dollar range, but even VC do this: http://avc.com/2018/01/taking-money-off-the-table/ http://avc.com/2018/01/taking-money-off-the-table/ Further, it's often encouraged as founders that take out enough money not to have significant financial concerns are more willing to aim for the fences.
- s2g 9y agoand the employees get nothing. oh but that founder risk. right.
- s2g 9y agoYeah but they are willing to let you siphon out a bunch of money in order to keep the founder happy and healthy.