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Ultimately, dilution doesn’t matter for 99% of employees. You could experience 10x dilution but if the price goes up 100x - you’re still up 10x. Would it be gre

Ultimately, dilution doesn’t matter for 99% of employees. You could experience 10x dilution but if the price goes up 100x - you’re still up 10x. Would it be great if you went up 100x and no dilution? Sure but that’s not how it works.

saulpw 3y ago
In actuality how it works is that the price goes up 10x and you experience 10x dilution. So everything seems up and to the right and the founders are 10x but when it comes time to cash out you're lucky to get a small bonus.
- bradlys 3y ago
  Maybe in some cases but I often see founders getting diluted a lot as well. Many times when startups get acquired/whatever - founders will get next to nothing because the investors had liquidation preferences. The founders still go through with it though cause it allows you to start another company and raise rounds. If you become known as a founder who prioritizes himself over his investors - who is going to give you money…?
rustcleaner 3y ago
Really need to move to a 1 "share" total (1 company 1 share), 16 decimal place volume, market cap*volume=price system; and not a market cap/float=price system. If a company really issues 0.5 cumulatively to employees, then half the company's equity is owned by employees. No decimal point fvckery to open the tent to the dilution camel's nose. You can use milliShares, microShares, nanoShares, etc, to avoid expressing a $10,000 0.000000134 Share position. There should only ever be one share: The Company. ADDENDUM: bonus if we get to a computational level that allows for arbitrary but valid rational numbers (with a data size cost to keep infinitesimals down) and replace fixed sized decimals, and modeling capabilities which allows us to list options contracts in a unified market, with arbitrary numeraires (think contracts for A priced in B instead of $) and expirations, and with any combination of strikes (compound positions), as one trade. BSM is continuous in all dimensions, and all it's really doing is expressing probabilities as price (plus a small uncertainty spread for risks and to goose out an edge out of Expected Value). This many expirations bins, many strikes bins, stuck to 100-share contracts, many (separate) stock vs USD bins, thing seems a bit too arbitrary when we have Wolfram Mathematica-tier abilities to handle the modeling for this stuff now. It's not 1989 anymore, get Tom Sosnoff on the phone I'm sure he'd pitch this innovative idea! Maybe I'll call it into his show soon...

saulpw 3y ago

In actuality how it works is that the price goes up 10x and you experience 10x dilution. So everything seems up and to the right and the founders are 10x but when it comes time to cash out you're lucky to get a small bonus.

bradlys 3y ago
Maybe in some cases but I often see founders getting diluted a lot as well. Many times when startups get acquired/whatever - founders will get next to nothing because the investors had liquidation preferences. The founders still go through with it though cause it allows you to start another company and raise rounds. If you become known as a founder who prioritizes himself over his investors - who is going to give you money…?

rustcleaner 3y ago

Really need to move to a 1 "share" total (1 company 1 share), 16 decimal place volume, market cap*volume=price system; and not a market cap/float=price system. If a company really issues 0.5 cumulatively to employees, then half the company's equity is owned by employees. No decimal point fvckery to open the tent to the dilution camel's nose. You can use milliShares, microShares, nanoShares, etc, to avoid expressing a $10,000 0.000000134 Share position. There should only ever be one share: The Company. ADDENDUM: bonus if we get to a computational level that allows for arbitrary but valid rational numbers (with a data size cost to keep infinitesimals down) and replace fixed sized decimals, and modeling capabilities which allows us to list options contracts in a unified market, with arbitrary numeraires (think contracts for A priced in B instead of $) and expirations, and with any combination of strikes (compound positions), as one trade. BSM is continuous in all dimensions, and all it's really doing is expressing probabilities as price (plus a small uncertainty spread for risks and to goose out an edge out of Expected Value). This many expirations bins, many strikes bins, stuck to 100-share contracts, many (separate) stock vs USD bins, thing seems a bit too arbitrary when we have Wolfram Mathematica-tier abilities to handle the modeling for this stuff now. It's not 1989 anymore, get Tom Sosnoff on the phone I'm sure he'd pitch this innovative idea! Maybe I'll call it into his show soon...