4 ms·
I wonder how common it is for investors to allow a partial cashout of employee stockholders like this? And how are they going to distribute the cash? pro-rata?
by troels 12y ago
I wonder how common it is for investors to allow a partial cashout of employee stockholders like this? And how are they going to distribute the cash? pro-rata?
- wslh 12y agoIt happened with Facebook and other companies. I can't find the specific article about this topic (I think from Fred Wilson). The logic is that there is an inconsistency in growing a company to the billion scale while you are just having a salary. It gives a financial safety to the people involved in the key decisions.
- mikeyouse 12y agoMark Suster wrote a pretty good post on the subject of founder liquidity that Fred Wilson then linked to; http://www.bothsidesofthetable.com/2009/09/02/should-founders-be-allowed-to-take-money-off-the-table/ http://www.bothsidesofthetable.com/2009/09/02/should-founder... Maybe the one you had in mind.
- wslh 12y agoYes, thank you. Here is the other article referencing it: http://avc.com/2009/09/founder-liquidity/ http://avc.com/2009/09/founder-liquidity/
- DanBlake 12y agoIts extremely common around the later stages (D and up) Logic is this : At that stage of a business, you want founders who are looking for a IPO or billion dollar business. If that founder still has a mortgage on his house, he is going to indirectly steer the company in more 'safe' ways to ensure his nestegg retains value. If you just give that founder a few million, hes no longer motivated by that initial cash payment and only has the moon to shoot for now.
- troels 12y agoThanks - That makes sense.