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> He wants to diminish the stigma around talent acquisitions. Why? Because that's how VCs get paid in the vast majority of cases. This is wrong. Remember the p
by harryh 14y ago
> He wants to diminish the stigma around talent acquisitions. Why? Because that's how VCs get paid in the vast majority of cases.
This is wrong. Remember the power law! The vast majority of the value of a VCs portfolio will be represented by their 1 or 2 most successful investments.
- danielweber 14y agoI have seen, many times, a company sold off for the exact amount required to pay back the VC investments of the employers of 3/5's of the board. (This is probably a violation of their fiduciary duty to represent the shareholders, but who is going to sue?)
- tptacek 14y agoThe majority of shareholders (usually by a lot) in these situations are well-represented by the directors.
- danielweber 14y agoI'm sure. Minority shareholder is not exactly a safe place to be.
- tptacek 14y agoPaul Graham says he's unaware of many instances where company owners acted to screw small shareholders, and I believe he believes that, but I've seen multiple instances of exactly that†, and because my exposure to startup management is so much smaller than his, and because I don't believe the instances I'm aware of are correlated to each other, I think he's simply wrong about this. †(most of those incidents started with the company encouraging departing employees to purchase their shares)