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Regarding C, usually you need to wait a bit post IPO until the investors had opportunity to sell their stock. Only THEN it's your turn. It's called lock-up peri

by est31 6y ago

Regarding C, usually you need to wait a bit post IPO until the investors had opportunity to sell their stock. Only THEN it's your turn. It's called lock-up period and lasts usually 180 days (half a year). Just keep that in mind. Also during sale, investors might choose to execute their liquidation preferences, which means that your shares might become worthless. Employees who paid hundreds of thousands of USD annually in opportunity cost have no such clauses to get their money back.

eanzenberg 6y ago
Investors have the same lockup period post-IPO as do employees and founders.
- est31 6y ago
  Huh, TIL. Investopedia only says "may also include early investors" [0]. I've checked the S-1's of some companies. Cloudflare's S-1 has a 180 day lockup for "Our executive officers, directors, and the holders of substantially all of our capital stock" In One Medical's S-1 "We, our directors, executive officers and the holders of substantially all of our equity securities, have agreed" to 180 day lockup. In the Unity S-1 they have "certain holders of our common stock": "All of our directors and executive officers and certain holders of our common stock and securities exercisable for or convertible into our common stock, are subject to lock-up agreements that restrict their ability to transfer such securities for a period of 180 days after the date of this prospectus", and apparently they allow selling of 30% of the stock within the first two days of trading. Couldn't find any reference on who those certain holders are. [0]: https://www.investopedia.com/terms/i/ipolockup.asp https://www.investopedia.com/terms/i/ipolockup.asp
  - kibibyte 6y ago
    I suspect it may be the IPO underwriters, the big financial institutions that most companies going public will work with to make their shares available to the public. In short, the company and these institutions negotiate the initial price of the shares beforehand, and on the day of the IPO, those institutions purchase those shares from the company at that price (thus funding the company) and then immediately flip them (hopefully for a profit) to the masses.

by est31 6y ago

eanzenberg 6y ago

Investors have the same lockup period post-IPO as do employees and founders.

est31 6y ago
Huh, TIL. Investopedia only says "may also include early investors" [0]. I've checked the S-1's of some companies. Cloudflare's S-1 has a 180 day lockup for "Our executive officers, directors, and the holders of substantially all of our capital stock" In One Medical's S-1 "We, our directors, executive officers and the holders of substantially all of our equity securities, have agreed" to 180 day lockup. In the Unity S-1 they have "certain holders of our common stock": "All of our directors and executive officers and certain holders of our common stock and securities exercisable for or convertible into our common stock, are subject to lock-up agreements that restrict their ability to transfer such securities for a period of 180 days after the date of this prospectus", and apparently they allow selling of 30% of the stock within the first two days of trading. Couldn't find any reference on who those certain holders are. [0]: https://www.investopedia.com/terms/i/ipolockup.asp https://www.investopedia.com/terms/i/ipolockup.asp
- kibibyte 6y ago
  I suspect it may be the IPO underwriters, the big financial institutions that most companies going public will work with to make their shares available to the public. In short, the company and these institutions negotiate the initial price of the shares beforehand, and on the day of the IPO, those institutions purchase those shares from the company at that price (thus funding the company) and then immediately flip them (hopefully for a profit) to the masses.