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> Co-founders are supposed to have confidence in the business they built - if they don't, why should other investors? But what's in it for the co-founder? Usua

by est31 7y ago

> Co-founders are supposed to have confidence in the business they built - if they don't, why should other investors? But what's in it for the co-founder? Usually it's that they have lots of power over the company, e.g. being a CEO, and have more freedom than someone who still has to prove that they deserve that power. Jeff Bezos for example "only" owns 100 billion USD but controls a 800 billion USD company, with the freedom and power of a cofounder. After a certain amount of money, say 10 million, you can fulfill most of your dreams. And there are plenty of people who have that amount. But few can say they are in control of a 0.8 trillion dollar company. As the other comments point out, Travis was kicked out though so he lost his power. So it's only understandable that he diversifies his portfolio.

Retric 7y ago
There are realms of wealth. Even 100m is not enough to comfortably afford a private jet. Several ultra wealthy like Bill Gates diversified a billion dollars from their company which seems to be about the limit where more money mostly becomes an abstraction. One example is people who actually own mansions generally live in a relatively small space inside. You can only really use one room at a time and walking around takes time.
- tjchear 7y ago
  This comment reminds me of another comment [0] on Reddit that talks about the different levels of wealth. An eye-opener for the rest of us for sure. [0]. https://www.reddit.com/r/AskReddit/comments/2s9u0s/what_do_insanely_wealthy_people_buy_that_ordinary/cnnmca8/ https://www.reddit.com/r/AskReddit/comments/2s9u0s/what_do_i...
  - moneywoes 7y ago
    Insane. I'm not sure if it's real or not based on the users post history but it's just hard to think about.
  - febeling 7y ago
    This is an amazing discussion of wealth in the linked reddit comment. Shows how easy it is to underestimate how different lives we all live, depending on our experiences and outlook - even in the same country. Money is probably just one big parameter, but there are surely many others.
  - est31 7y ago
    Hmmm that's a very interesting reddit comment. Thanks for sharing! I guess my comment was a bit too imprecise. Of course you can always afford additional luxuries, and money still remains a big factor in relative pecking order questions (which become more important the more super-rich friends you have!). But power over personal staff, even if it travels with you in your private jet and occupies half of the hotel when you arrive is not the same as power over tens to hundreds of thousands of employees. Also, that private staff is a net loss while the company is making you money.
  - just0nce 7y ago
    Throwaway for obvious reasons, apologies. FWIW, I kno(e)w four billionaires through my work (one deceased, one I lost contact with), and their life is not at all like described here, though they could afford that and more they keep a pretty low profile and you likely have never heard of them, and likely never will. But the 'controlling interest in a company you've likely heard about' is a common factor for three of those four. The people that throw money around as if there is no tomorrow are typically the ones that have an unhealthy urge to be recognized as wealthy, the really wealthy people are relatively quiet about it in comparison. That may of course be a reflection of the group of people that person connected to, I can see how there are very different circles of wealthy people just as there are different circles of people that are not wealthy.
    - manigandham 7y ago
      Billionaires are just like the rest us when it comes to variety of personalities and motivations. The wealth just lets them indulge more in the extremes (like complete privacy or flamboyant fame).
- jjeaff 7y ago
  $100m can very comfortably afford a private jet. Maybe not a brand new G6, but a small to mid size jet could be comfortably purchased and maintained while barely spending more than the market appreciation of that $100m.
  - fastball 7y ago
    A new mid-size jet will run you $10-20M. Pilots and maintenance will cost you $1M+ per year. Depending on how much you use it, that could be significantly more. Spending 10-20% of your net worth on a vehicle up front + 1% pa going forward is not "comfortably afford". If my net worth was $2M, I would not say that I could comfortably afford a lambo.
    - authoritarian 7y ago
      Don't buy a new mid-sized jet then...? You can certainly afford a small, used private jet if you have $100 million. Not to mention a lot of people that own private jets rent/lease them out, just like they do with yachts, which can help to offset a lot of the recurring costs. I know a guy that owns a relatively small business and he has a modest private jet (as modest as you can get while owning a jet) and he certainly doesn't have 100mm. Aviation is one of his hobbies, which likely plays into his decision, but it is feasible
    - deleted 7y ago
      [deleted]
    - jjeaff 7y ago
      Why buy a new mid-sized jet? I was responding to the comment that a $100m net worth can't afford a private jet, which is just not true. There are a LOT of options between commercial and a -new- mid-size jet. Buy used or get a brand new HondaJet for less than $5m. Can be flown by a single pilot and can fly anywhere in the continental U.S. with no more than a single re-fuel stop. Or, fly anywhere in one swoop with a less than 10 year old Citation CJ4 or similar that will run you less than $6m and seat 10 passengers. And the annual operating costs will not get you anywhere close to $1m. Even a G650 isn't going to run you much more than $1.5m annually unless you are putting a ton of hours on it. But I will also say that 10-20% of your net worth (wouldn't be up-front, it would be financed.) is not that big of a deal when you have a huge net worth. It's a lot when you make just enough to survive. It's not a problem when you still have enough left over for several lifetimes of comfortable living. Just depends on your priorities.
- kjs3 7y ago
  That's not completely true. Ignoring the tax and operational hedges I can employ if I legitimately use my plane for business purposes, if I fly more than 200 hours a year it's not that (relatively) expensive to own a personal jet. Admittedly, I'm not talking about a Gulfstream G5 or Lear 75, but something like a Citation III or Lear 31/35 cost US$500K-US$1m to acquire (refurbished) and cost less than $10/mi to fly (so less than US$1m for around 200/hrs/yr all in). That's not a big chunk of $100m, especially if you can justify it for business reasons. At the local GA airport where my niece is getting her pilots license, there are lot's of businessfolk and small businesses that justify owning an 8-12 place jet, and they have significantly less than $100m in liquid assets.
  - Retric 7y ago
    To be clear I am speaking of someone living off of 100m in assets. You can have negative net worth, be pulling in 35m/year and reasonably splurge on a 1m/year expense. But, if you’re living off of say 5m/year from your assets a 1m/year splurge is a huge chunk of your income. At that level renting one would be far more appealing to most people. Though sure if owning a jet was a major hobby vs a means of transportation it’s easily possibly, just as I said a major expense.
    - kjs3 7y ago
      If I'm making $100k/yr and I spend $20k cash on a second car (e.g. I don't use that often), or a pool, it's the same ratio, and people do it all the time. And that's just luxury items, not things I can justify from a business perspective. And I don't disagree for most people renting or fractional ownership of planes are undoubtedly better deals (200 hours is a lot of time in the air), but none of that is what you said.
      - Retric 7y ago
        It’s both 1m upfront and 1m every year after that. So, buying a second car for 20k every year is a different story. Put another way, someone making 100k/year could send their kid to prove school for 20k/year, but it’s a major expense that would impact their lifestyle or savings significantly. It’s possible, but not affordable.
- perl4ever 7y ago
  If you have tens or hundreds of millions, I imagine you could find ways to do the stuff associated with billionaires without spending anywhere near as much. If you want to fly on a private jet, you can buy a fractional share. If you want a mansion, you can buy almost anything, you just don't buy a dozen and forget about them. You would just have to have a scaled up middle class budgeting sensibility instead of viewing your wealth as unlimited. If there is anything that really is limited to billionaires, it seems to me logically it's going to be status, proximity, location, attention that are in limited supply. Not material things.

by est31 7y ago

Retric 7y ago

There are realms of wealth. Even 100m is not enough to comfortably afford a private jet. Several ultra wealthy like Bill Gates diversified a billion dollars from their company which seems to be about the limit where more money mostly becomes an abstraction. One example is people who actually own mansions generally live in a relatively small space inside. You can only really use one room at a time and walking around takes time.

tjchear 7y ago
This comment reminds me of another comment [0] on Reddit that talks about the different levels of wealth. An eye-opener for the rest of us for sure. [0]. https://www.reddit.com/r/AskReddit/comments/2s9u0s/what_do_insanely_wealthy_people_buy_that_ordinary/cnnmca8/ https://www.reddit.com/r/AskReddit/comments/2s9u0s/what_do_i...
- moneywoes 7y ago
  Insane. I'm not sure if it's real or not based on the users post history but it's just hard to think about.
- febeling 7y ago
  This is an amazing discussion of wealth in the linked reddit comment. Shows how easy it is to underestimate how different lives we all live, depending on our experiences and outlook - even in the same country. Money is probably just one big parameter, but there are surely many others.
- est31 7y ago
  Hmmm that's a very interesting reddit comment. Thanks for sharing! I guess my comment was a bit too imprecise. Of course you can always afford additional luxuries, and money still remains a big factor in relative pecking order questions (which become more important the more super-rich friends you have!). But power over personal staff, even if it travels with you in your private jet and occupies half of the hotel when you arrive is not the same as power over tens to hundreds of thousands of employees. Also, that private staff is a net loss while the company is making you money.
- just0nce 7y ago
  Throwaway for obvious reasons, apologies. FWIW, I kno(e)w four billionaires through my work (one deceased, one I lost contact with), and their life is not at all like described here, though they could afford that and more they keep a pretty low profile and you likely have never heard of them, and likely never will. But the 'controlling interest in a company you've likely heard about' is a common factor for three of those four. The people that throw money around as if there is no tomorrow are typically the ones that have an unhealthy urge to be recognized as wealthy, the really wealthy people are relatively quiet about it in comparison. That may of course be a reflection of the group of people that person connected to, I can see how there are very different circles of wealthy people just as there are different circles of people that are not wealthy.
  - manigandham 7y ago
    Billionaires are just like the rest us when it comes to variety of personalities and motivations. The wealth just lets them indulge more in the extremes (like complete privacy or flamboyant fame).
jjeaff 7y ago
$100m can very comfortably afford a private jet. Maybe not a brand new G6, but a small to mid size jet could be comfortably purchased and maintained while barely spending more than the market appreciation of that $100m.
- fastball 7y ago
  A new mid-size jet will run you $10-20M. Pilots and maintenance will cost you $1M+ per year. Depending on how much you use it, that could be significantly more. Spending 10-20% of your net worth on a vehicle up front + 1% pa going forward is not "comfortably afford". If my net worth was $2M, I would not say that I could comfortably afford a lambo.
  - authoritarian 7y ago
    Don't buy a new mid-sized jet then...? You can certainly afford a small, used private jet if you have $100 million. Not to mention a lot of people that own private jets rent/lease them out, just like they do with yachts, which can help to offset a lot of the recurring costs. I know a guy that owns a relatively small business and he has a modest private jet (as modest as you can get while owning a jet) and he certainly doesn't have 100mm. Aviation is one of his hobbies, which likely plays into his decision, but it is feasible
  - deleted 7y ago
    [deleted]
  - jjeaff 7y ago
    Why buy a new mid-sized jet? I was responding to the comment that a $100m net worth can't afford a private jet, which is just not true. There are a LOT of options between commercial and a -new- mid-size jet. Buy used or get a brand new HondaJet for less than $5m. Can be flown by a single pilot and can fly anywhere in the continental U.S. with no more than a single re-fuel stop. Or, fly anywhere in one swoop with a less than 10 year old Citation CJ4 or similar that will run you less than $6m and seat 10 passengers. And the annual operating costs will not get you anywhere close to $1m. Even a G650 isn't going to run you much more than $1.5m annually unless you are putting a ton of hours on it. But I will also say that 10-20% of your net worth (wouldn't be up-front, it would be financed.) is not that big of a deal when you have a huge net worth. It's a lot when you make just enough to survive. It's not a problem when you still have enough left over for several lifetimes of comfortable living. Just depends on your priorities.
kjs3 7y ago
That's not completely true. Ignoring the tax and operational hedges I can employ if I legitimately use my plane for business purposes, if I fly more than 200 hours a year it's not that (relatively) expensive to own a personal jet. Admittedly, I'm not talking about a Gulfstream G5 or Lear 75, but something like a Citation III or Lear 31/35 cost US$500K-US$1m to acquire (refurbished) and cost less than $10/mi to fly (so less than US$1m for around 200/hrs/yr all in). That's not a big chunk of $100m, especially if you can justify it for business reasons. At the local GA airport where my niece is getting her pilots license, there are lot's of businessfolk and small businesses that justify owning an 8-12 place jet, and they have significantly less than $100m in liquid assets.
- Retric 7y ago
  To be clear I am speaking of someone living off of 100m in assets. You can have negative net worth, be pulling in 35m/year and reasonably splurge on a 1m/year expense. But, if you’re living off of say 5m/year from your assets a 1m/year splurge is a huge chunk of your income. At that level renting one would be far more appealing to most people. Though sure if owning a jet was a major hobby vs a means of transportation it’s easily possibly, just as I said a major expense.
  - kjs3 7y ago
    If I'm making $100k/yr and I spend $20k cash on a second car (e.g. I don't use that often), or a pool, it's the same ratio, and people do it all the time. And that's just luxury items, not things I can justify from a business perspective. And I don't disagree for most people renting or fractional ownership of planes are undoubtedly better deals (200 hours is a lot of time in the air), but none of that is what you said.
    - Retric 7y ago
      It’s both 1m upfront and 1m every year after that. So, buying a second car for 20k every year is a different story. Put another way, someone making 100k/year could send their kid to prove school for 20k/year, but it’s a major expense that would impact their lifestyle or savings significantly. It’s possible, but not affordable.
perl4ever 7y ago
If you have tens or hundreds of millions, I imagine you could find ways to do the stuff associated with billionaires without spending anywhere near as much. If you want to fly on a private jet, you can buy a fractional share. If you want a mansion, you can buy almost anything, you just don't buy a dozen and forget about them. You would just have to have a scaled up middle class budgeting sensibility instead of viewing your wealth as unlimited. If there is anything that really is limited to billionaires, it seems to me logically it's going to be status, proximity, location, attention that are in limited supply. Not material things.