5 ms·

Ignoring the fact, that 15/1100 shares are ~1.36% so in your case they had to add roughly a 100x the current shares, not 10x like in your example. This already

by soxocx 3y ago

Ignoring the fact, that 15/1100 shares are ~1.36% so in your case they had to add roughly a 100x the current shares, not 10x like in your example. This already reads like the company was not doing well at that point. Side note: If it wasn't a down round, measured from your entry event, your shares gross value still went up. In general: If the company needs 100k in cash, and all shareholders add cash relative to their share in the company, there is no dilution, cash is added, all is good. If some or all of the current shareholders can't add cash relative to their shares, you need an external investor, that investor has to "get shares from somewhere". If the investor would buy them from the current shareholders directly, there would be no new money in the company, the money would go to the shareholders, that is not what we want here. So new shares are created and only shareholders that do not do a pro rata investment dilute their shares relative to their current share, and maybe a partial pro rata investment, to make up for these new shares, which is fair. Without a down round, valued individually for each entry event of the current shareholders, nobody loses any money here. I do not understand why you are upset. Am I missing smth?

waynr 3y ago
All your comment talked about was money in the abstract, so you totally missed the point. The point was that here we have a technical founder who spent years of their life working hard to build a product only to have their hard work de-valued in ownership terms by a non-technical founder who would be cleaning toilets were it not for their ability to scam naive engineers into doing The Work for them. The moral of the story: don't work hard for someone who can de-value your hard work on a whim while laughing all the way to the bank. I've looked through job listings on workatastartup and I've interviewed with some of those companies. I've also submitted proposals to YC and joined their cofounder search site. So I am mildly familiar with the landscape of VC funding and startups. On the cofounder search site I had dozens of non-technical co-founders who were trying to scam me out of years of my life by offering me anywhere from 10% to 49% equity as a...get this...COFOUNDER. These people don't want to do the work to develop the skills necessary to make their oftentimes idiotic visions a reality and they almost all want controlling equity stakes, as described in this poor bastard's story.
- fallingknife 3y ago
  > here we have a technical founder who spent years of their life working hard to build a product only to have their hard work de-valued in ownership terms by a non-technical founder who would be cleaning toilets were it not for their ability to scam naive engineers into doing The Work for them. How can you conclude that? You have only heard one side of the story. The other probably goes something like: > I hired a CTO who turned out to be incompetent and was unable to build the organization and take advantage of a great opportunity. When we finally convinced him to leave, the company was near failure and we had to raise money at a near zero valuation to keep the lights on. He's getting quite a deal with 0.15% for putting in no money when the rest of us had to risk putting money in to rescue his failure. And there's no way to tell what's true. Usually in these cases both sides make themselves out to be saints and the other side is the devil, and best to just not believe a word of any of it without evidence.
  - waynr 3y ago
    > You have only heard one side of the story. Yep. I don't need to hear the side of the story of the people who devalued the hard work of others within their org for their own personal gain. The only side of the story I need to hear is the side of the CO-founder who was only given 15% stake in the company to begin with so that they could never protect themselves from the clearly Machiavellian CEO. CEOs in general, tend to be charismatic. They tend to be storytellers. That's often the reason they are chosen for their role; it's often their only real skill -- the ability to develop and push narrative. In my view, I am better off not hearing the CEO's side of the story. Because I, like many people of average or below intelligence, am unlikely to be able to see through the lies in their narrative. Regardless of what's true, I would probably be convinced by whatever they say. I have personal experience being fooled by charismatic people. The only side of the story I need to hear is the side of the person who was duped. > And there's no way to tell what's true. 15% stake for a co-founder who clearly didn't understand the stakes (pun intended) involved in taking such a low equity share clearly points out where the evil lies here.
    - fallingknife 3y ago

by soxocx 3y ago

waynr 3y ago

All your comment talked about was money in the abstract, so you totally missed the point. The point was that here we have a technical founder who spent years of their life working hard to build a product only to have their hard work de-valued in ownership terms by a non-technical founder who would be cleaning toilets were it not for their ability to scam naive engineers into doing The Work for them. The moral of the story: don't work hard for someone who can de-value your hard work on a whim while laughing all the way to the bank. I've looked through job listings on workatastartup and I've interviewed with some of those companies. I've also submitted proposals to YC and joined their cofounder search site. So I am mildly familiar with the landscape of VC funding and startups. On the cofounder search site I had dozens of non-technical co-founders who were trying to scam me out of years of my life by offering me anywhere from 10% to 49% equity as a...get this...COFOUNDER. These people don't want to do the work to develop the skills necessary to make their oftentimes idiotic visions a reality and they almost all want controlling equity stakes, as described in this poor bastard's story.

fallingknife 3y ago
> here we have a technical founder who spent years of their life working hard to build a product only to have their hard work de-valued in ownership terms by a non-technical founder who would be cleaning toilets were it not for their ability to scam naive engineers into doing The Work for them. How can you conclude that? You have only heard one side of the story. The other probably goes something like: > I hired a CTO who turned out to be incompetent and was unable to build the organization and take advantage of a great opportunity. When we finally convinced him to leave, the company was near failure and we had to raise money at a near zero valuation to keep the lights on. He's getting quite a deal with 0.15% for putting in no money when the rest of us had to risk putting money in to rescue his failure. And there's no way to tell what's true. Usually in these cases both sides make themselves out to be saints and the other side is the devil, and best to just not believe a word of any of it without evidence.
- waynr 3y ago
  > You have only heard one side of the story. Yep. I don't need to hear the side of the story of the people who devalued the hard work of others within their org for their own personal gain. The only side of the story I need to hear is the side of the CO-founder who was only given 15% stake in the company to begin with so that they could never protect themselves from the clearly Machiavellian CEO. CEOs in general, tend to be charismatic. They tend to be storytellers. That's often the reason they are chosen for their role; it's often their only real skill -- the ability to develop and push narrative. In my view, I am better off not hearing the CEO's side of the story. Because I, like many people of average or below intelligence, am unlikely to be able to see through the lies in their narrative. Regardless of what's true, I would probably be convinced by whatever they say. I have personal experience being fooled by charismatic people. The only side of the story I need to hear is the side of the person who was duped. > And there's no way to tell what's true. 15% stake for a co-founder who clearly didn't understand the stakes (pun intended) involved in taking such a low equity share clearly points out where the evil lies here.
  - fallingknife 3y ago