3 ms·
whew thought this was a guide on how to avoid getting manipulated on social media into buying calls and puts after reading DDs i think best thing to do is not
by spxneo 3y ago
whew thought this was a guide on how to avoid getting manipulated on social media into buying calls and puts after reading DDs
i think best thing to do is not offer illiquid stock options but a sliding scale revenue share.
Of all the startups that I have been a part of, only 1 found buyers for the stock options but even then it was too little because it didn't IPO, it just sold to another player.
It's down right misleading to offer pieces of paper with the right to buy a stock that has almost nil chance of seeing retailers without disclosing the odds. The odds are close to nil for startups looking to IPO.
By doing revenue share, it forces you to be long term orientated, you are now focused on growing a steady stream of net positive cash flow. This puts you in a much better negotiating position, you can use leverage from banks to get anywhere from 30~60 cents on the dollar, to redistribute back into operations or bonuses.
THEN you can accept that invite from a VC or PE (dont recommend it due to the time constrained nature of PEs that are incompatible with long term orientated management) and absolutely have the odds in your favour.