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Is "founder liquidity" exactly like what it sounds? Does that money go right into the founders' personal bank accounts?
by skizm 13y ago
Is "founder liquidity" exactly like what it sounds? Does that money go right into the founders' personal bank accounts?
- diziet 13y agoSo apparently founder liquidity is something investors do with hyper growth companies to prevent them from selling too early. It is suppose to take the risk out away from the founders and align their incentives towards the higher expected return IPO/gigantic acquisition outcome.
- cheald 13y agoMore or less, yes. The founders sell some of their stake for cash so that they are left free to focus on the company rather than worrying if they are going to make rent.
- mathattack 13y agoExactly. It's very rare that they take all the money off the table, but it's enough to easily pay the bills, while still leaving them with enough of a stake to shoot for the moon.
- danhak 13y agoI don't think anybody's worried about making rent: http://la.curbed.com/archives/2013/12/snapchat_cofounder_just_dropped_21mm_on_a_house_in_venice.php http://la.curbed.com/archives/2013/12/snapchat_cofounder_jus...
- mahyarm 13y agoWhich usually doesn't mean employee liquidity :/