4 ms·
This is a side effect of companies filling coffers via investors instead of via customers. If you're part of a high growth company with reasonable earnings, tha
by tacos 12y ago
This is a side effect of companies filling coffers via investors instead of via customers. If you're part of a high growth company with reasonable earnings, that sales multiple means you'll likely get a taste of the action. If you're in a high growth VC funded company with no revenue, then that multiple goes to the VC and maybe one or two people they might like to work with again.
You can restate this via all sorts of dilution and complex shareholder classes and endless paperwork and HN blogposts, but that's what it boils down to.
Chances are you're in a no-growth or modest-growth company so none of this matters and you should read a basic business book from the 1960s instead, serve your customers well, and charge a reasonable fee for the goods and services you deliver.
- swingbridge 12y agoIndeed. If the company is a "real business" with actual customers and real profitable finances then those shares can be worth something. If it's all a bunch of VC backed fluff, well then good luck. At that point it's just a game of selling these virtual units to others wheeling and dealing in similar pumped up virtual fluff. There are lots of ways the 'options' holders get diluted and made irrelevant and are in effect just pawns that can be made to work for less cash based on the, mostly, pipe dream that these options will be worth something some day. One needs to be very careful if you're in this bucket.
- fapjacks 12y agoSelf-congratulating masturbatory financial recursion. That's the phrase I use.