I just read an article about the Snapchat founders taking some money off the table during their recent funding round and I am perplexed (best word I can think of) why is there such a stigma against founders doing a this and the general negativity around it.
My personal view has always been that if one allows the founders to cash in on some of their equity on a financing round, wouldn't that provide some financial security to the founders and allow them to "aim for the moon"? If I had a startup which is at that nexus point where it has a potential to be something bigger AND i'm generally broke, I will be less inclined to take any risk that may end with me being bankrupt. Having said that, if I was allowed to take some money off the table where I'm enough to be financially secure, I would be more susceptible to go all way with my startup.
I keep saying "some" because there is a difference between cashing in on a small or big part of the founder's equity and I can understand the media frenzy that arises from a founder cashing in a big part of their equity (i.e. Groupon) but I don't get why the same stigma exist against founders who do the same for a small part of their equity.
This is a genuine question and would like to know what is the general view out there for any HNers, VCs or founders alike.
My personal view has always been that if one allows the founders to cash in on some of their equity on a financing round, wouldn't that provide some financial security to the founders and allow them to "aim for the moon"? If I had a startup which is at that nexus point where it has a potential to be something bigger AND i'm generally broke, I will be less inclined to take any risk that may end with me being bankrupt. Having said that, if I was allowed to take some money off the table where I'm enough to be financially secure, I would be more susceptible to go all way with my startup.
I keep saying "some" because there is a difference between cashing in on a small or big part of the founder's equity and I can understand the media frenzy that arises from a founder cashing in a big part of their equity (i.e. Groupon) but I don't get why the same stigma exist against founders who do the same for a small part of their equity.
This is a genuine question and would like to know what is the general view out there for any HNers, VCs or founders alike.