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I "lost" well over a half million dollars because founders turned down a $50-$60mm acquisition offer to try to hit a home run. The problem was the ceo had been previously acquired and left before he fully vested in order to start the company I worked at, and had walked away from $5m in the process. (Which is crazy, right? That's a $5m bird in hand if he just didn't get fired for 2 years.) Anyway, he was really attached to the idea of building a company worth $300m plus so instead he built a company worth a handful of millions.

It was pretty damn frustrating for me.




There are so many of these stories of wealthy founders turning down bird in the hand offers and then losing it all X years later even though the company got 'big'. I too got burned by one myself.

I advise friends now to avoid those companies as employees, because an exit that would be very good for you might be turned down by wealthy founders. Joining a startup with a wealthy founder means they will go huge or bust, and nothing in between. Great if you want to do that yourself, but you usually want to be wealthy already.


Which is kind of funny advice since essentially you're suggesting to avoid working for companies with successful founders.


As all the FTC standard warnings say, past performance is not a guarantee of future performance.

A wealthy founder has already past the point of "fuck you money" and financial independence. Adding another $10 million to his current $10 million isn't going to have a very meaningful effect on their life. Another $+100 million will, which why they go big or die trying, because cashing out with a $10 million payoff is the same thing in their lives as failing. Also running your own company is fun in itself.

You as an employee do not have financial independence most likely, and independence will be a huge change to your life. It's the incentive conflict of interest that is the fundamental issue here. Non-wealthy founders will probably have a cash out point in their heads and will take bird in the hand offers that would give them financial independence.

Also I say wealthy founders, not successful founders. A founder can become wealthy via many means. He could of been an early employee of a successful company (like BeOS and Jean Louis Gasse). Had a relatively minor success after a decade of struggle and made it super big (uber). Cashed out halfway through and is now wealthy (evernote, twitter and many others), etc.

Wealthy founders will do things like reject $400m offers when a company has existed for a year and only has $10m in series A funding because they want to be the next superstar / 'unicorn'.


Yes, because even though the founders are "successful" you won't see any money beyond your salary.

It underlines the fact that as soon as you take VC funding, you're effectively working for someone else - even if you're the CEO.


Just because the founder is successful doesn't mean they have your interests at heart.


It's very naive to bet your future on the hypothetical benevolence of other people.


Yep. I too got burned by one. I wonder what the ratio is.


counterpoint: I worked at a different startup in the last couple of years that got acquired for around $400 million (after I left) and the found was a very wealthy serial entrepreneur. Basically, you never know. Basically don't treat a job at a startup as a way to get rich.


But surely for every number of founders like this there are Zukerbergs that turn down a $1B offer for FB by Yahoo in 2007 or whenever it was.


And how many Zuckerbergs do you know...?


Is this just hind sight talking, or was it obvious the idea didn't have legs at the time?


In hindsight, there were definite revenue challenges -- customers would try the product, like it, but not sign purchase contracts very often. How much of that is me being grumpy and how much is normal growing pains I don't know, but customers definitely weren't jumping up and down throwing money at us. Had the company been earning even millions of dollars, it would have been a different story. We made like $40k the first full year of attempting to charge money for the product. That, to me, augurs towards a poor outcome and supports selling.




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