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Posted by holman 2 days ago

Taking money off the table(zachholman.com)
133 points | 107 commentspage 2
bryanlarsen 2 days ago|
You don't have to take all the money off the table; in fact you usually can't. Take some off to have your cake and eat it too.
pyrolistical 2 days ago||
Another way to think about it is, take the dollar amount if you sold it all.

Then consider it as an offer to buy into the startup at the same dollar amount.

Would you invest?

Not selling is the same as investing in the startup.

This same logic applies to stocks you are holding.

thomas_witt 2 days ago||
That advice also serves INHO well regarding angel investments and potential secondaries. If you made some x in a short time, take the money and run and leave the risk to institutional VCs who are not investing their own money.
lostlogin 2 days ago||
For those like me that had never heard of of Zenefits.

https://en.wikipedia.org/wiki/TriNet_Zenefits

don_neufeld 2 days ago||
A+ advice.
BinaryIgor 2 days ago||
TL;DR: don't be greedy, guaranteed a lot now is better than highly unlikely more in the future
AnimalMuppet 2 days ago||
When money is growing on trees, pick it.
tidwall 2 days ago|||
A bird in the hand.
ant6n 2 days ago||
A sparrow in hand is better than a pigeon on the roof.
madeofpalk 2 days ago|||
And where does the stone fit in with these two birds?
knicholes 2 days ago|||
It's rolling into a mossy gander, or something.
AstroBen 2 days ago|||
gotta wait til one of them gets the worm, then you find out
selimthegrim 2 days ago|||
I never heard of sparrow pie.
SoftTalker 2 days ago|||
Pigs get fat, hogs get slaughtered.
simonswords82 2 days ago||
AKA quit while you're ahead
nonethewiser 2 days ago||
[flagged]
mapontosevenths 2 days ago||
Last week I bought groceries rather than a 50lb bag of Monkey Chow. Objectively the Monkey Chow would have been simpler, cheaper, and maybe even healthier but I kind of enjoy interesting things.

If you would prefer a bowl of Monkey Chow that's fine, but don't begrudge the rest of us our souls.

EDIT - I realize now that not everyone knows that Monkey Chow is a thing:

https://web.archive.org/web/20230102005704/https://www.angry...

https://www.sharpefarmsupplies.com/livestock/specialty-anima...

apsurd 2 days ago|||
Why do you feel the need to talk about how people talk?

And now you got me doing it lol. It's just something to do. we're all doing it. chill.

and now you're stuck cuz if you respond to me, well is it jut an inferiority complex, need to be right?

nonethewiser 2 days ago||
I think I already provided that context. I dont understand why someone would talk this way because it feels like something that would satisfy the ego of a toddler. And be ingratiating at best to a well-adjusted adult. I would feel similarly if someone pinched my cheeks and said "aw arent you just a wittle cutesy-wootsy." Yet I see it used without any meaning of offense.

Is it a need to be special? Do you get this overly flattering language in cultures where individualism isnt so pronounced?

apsurd 2 days ago|||
After thinking about it charitably, it seems like you're asking "why are people different?" Are they being different because they want to convey "being different".

Maybe. But also, people are different because people are different. There's variance. Variance in the Universe is a good thing. I'm no physicist so I'm going to get this some degree of wrong but I'm pretty sure variance (of time/space) is pretty much the definition of reality.

The language topic is good too. English does have a ton of words and so it's baked in the language to be flowery, "extra" if you will. Yeah, different languages, also cool.

SappingTillion3 2 days ago|||
why do people feel like they need the last word? it feels like something that would satisfy the ego of a toddler.
nonethewiser 2 days ago||
Im responding to his question. Now I'm responding to your question. It's not fair to characterize that as "getting the last word." Don't you think?
terrelln 2 days ago|||
Its slang that has made its way from queer culture into mainstream. It is not meant to satisfy anyones ego, other than it just has vague positive connotations. It is used in a pretty equivalent way as "take that money, dude".
shocks 2 days ago||
You’re reading too much into it.
nonethewiser 2 days ago||
Meaning you dont think it has anything to do with an inferiority complex or need to be special? I would call that more of a loose hypothesis than a firm theory. I am very much wondering why. That's just some speculation.
SappingTillion3 2 days ago||
https://en.wikipedia.org/wiki/Just_Asking_Questions

just jaq'ing off huh?

nonethewiser 2 days ago||
Can you elaborate? It is a question, because I'm curious, but clearly not all questions are hinting at some conspiracy. What conspiracy do you think I'm hinting at?
SappingTillion3 2 days ago||
>If criticized, the proponent of such a claim may then defend themselves by asserting they were merely asking questions

hope you're OK.

nachox999 2 days ago|
I believe the complete opposite. If someone is willing to buy your business, no matter the amount, it’s because it’s worth MUCH more than what they’re paying. It’s illogical for them to pay less than its real value. It’s even illogical to think they’d pay exactly what it’s worth. Why would somebody bother buying a company if they were only going to break even?
arjvik 2 days ago||
This assumes risk appetite is the same. For instance, insurance works this way - in expectation you’d pay less yourself, but a 3 sigma event can bankrupt you. You willingly pass on this risk for a price.
nachox999 2 days ago||
great example, thanks
wat10000 2 days ago|||
The reason anybody is willing to buy and sell anything is because there's no single "real value" of anything. Value is contextual. When the grocery store gives me a cake in exchange for $20, it's because the value of the cake, to them, is less than $20. Conversely, the value of the cake to me is more than $20, otherwise I wouldn't be buying it.

If you sell your business, it's because the value of the business to you is less than the purchase price. Likewise, the value to the buyer is greater than the purchase price.

pavon 2 days ago|||
No, it means they buyer thinks it is worth more than what they are paying. It doesn't mean they are right. It also means that this is the only buyer who thinks the company is worth that much, because if someone was willing to pay more, the company would be selling to them instead.

Ideally startups are about creating value, and making a return on that value, but more and more they look like they are instead selling hype to a series of investors who are trying not to get stuck with the hot potato.

driverdan 2 days ago|||
I worked for a company that had a buyout offer for 8 or 9 figures that they turned down. After I left the company ended up collapsing with no exit. It happens frequently.
apsurd 2 days ago|||
Everything you said is true. It doesn't refute that you should sell the 10% though. You're describing commerce.

not getting it.

charcircuit 2 days ago|||
You are ignoring the risk aspect. There is a chance that it is worth more than they are paying, but there is also a chance it will be worth less.

Selling a part of your business can help spread risk to a new investor reducing your own personal risk.

nachox999 2 days ago||
what I'm saying is the buyers are subject to the same risks, I'm not ignoring them
pton_xd 2 days ago||
But obviously an investor with $XYZ under management that can make N bets is better equipped to handle that risk than you, an individual with 1 bet.
nachox999 2 days ago||
fair point :)
AstroBen 2 days ago|||
what if the buyer has something that can add value to the business?
tyre 2 days ago||
Almost all startups go to zero, meaning every cent what VCs paid for stock, at any price, did not end up being worth more than they paid.
nachox999 2 days ago||
Sure, what I'm getting at is that in your hands, or in the buyer's, the value can go to zero or multiply. If they buy, it's because they assess that the chances of it multiplying are greater than it going to zero. Why sell in that case?
realslimjd 2 days ago|||
The buyer is not assessing that way. The buyer has a diverse portfolio where they only need 10-20% of their bets to succeed. The math is not in your favor as an employee.
jaggederest 2 days ago||||
Your intuition is wrong here. Check out the Kelly criterion and do a little math - by my math, when you have modest personal assets <$1m, if you expect a 200x return from today, and you think there's a 1% chance that'll happen, you should sell 99% of your current stock and only hold the 1%. This maximizes the preservation of your net wealth.

VCs have MUCH larger bankrolls and so their Kelly bet is proportionately larger, but not percentage larger.

dkural 2 days ago|||
You're selling only 10%, you still get to see the other 90% go up in value, but that 10% you sold protects you from a wipe-out.