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In addition to that, the founders are signaling their own long-term lack of confidence by selling their shares when no one else is allowed to do so. Employees
by human20190310 7y ago
In addition to that, the founders are signaling their own long-term lack of confidence by selling their shares when no one else is allowed to do so.
Employees are correct to pressure their employers to IPO or GTFO, especially considering that many of these companies are on a trajectory where they're worth less over time (e.g. the collapsing valuations of Uber, Lyft, Slack, "We", etc).
- ramraj07 7y agoTrue in the case of wework yes but in the case of Airbnb the founders seem to have collectively cashed out only a few tens of million, which just sounds like they cashed out just enough to buy themselves nice cars or something
- almost_usual 7y agoProbably homes and enough to guarantee a comfy lifestyle if things went sideways.
- human20190310 7y agoIf the founders are hedging their bets and asking (or requiring) others not to, it's a bad sign.
- jmastrangelo 7y agoOften yes but in this case I don't think so. These guys are worth _billions_. It would be financially imprudent to not cash out a little bit purely for diversification and buying a nice house or two. If you'rea a founder in a world where you can fundraise enormous sums from private markets, why deal with the headache of going public?
- kjksf 7y agoIf I had 500 million in paper valuation and could turn 10 million into real dollars, I would do it and so would you. I would have to be an idiot not to do it. Not being able to sell shares in private companies is a standard practice. There are good reasons for that. The reason public market is heavily regulated is to prevent fraud. The fact that large shareholders can sell shares in companies is also a standard practice. You might not like it but it's not capricious either. The founders created the company, the investors put money in it. They get better kind of shares than an employee because their contribution is materially different.
- human20190310 7y ago> I would do it and so would you. I would have to be an idiot not to do it. It's smart. That doesn't mean it shouldn't be criticized. It's forcing employees and others to take risks (specifically an equity position that cannot be partially sold to hedge against company failure) that the founders are not willing to take themselves.
- deleted 7y ago[deleted]
- freyr 7y ago$7M apiece would buy you quite a nice car.
- deleted 7y ago[deleted]
- ummonk 7y agoEmployees would like to cash out enough to get downpayments on pricey Bay Area homes too, but screw them amirite?