The upfront payment sweetens the pot. Now the 'cofounder' has the choice of 100 million on the table v/s say a much larger POTENTIAL payout 5-10 years down the line.
Are there really people who would turn down a hundred million dollars for a chance at a larger potential payout in 5-10 years? Are these people even members of Homo sapiens?
A $100MM bonus seems like a career-ending bonus to me. How do you keep going to work after that?
> Are there really people who would turn down a hundred million dollars for a chance at a larger potential payout in 5-10 years?
Sure, and the numbers get far larger than $100 million.
Larry Page and Sergey Brin for example, turned down very large acquisition offers, including for at least a billion dollars from Yahoo, at a time when they didn't even have a serious business model.
Mark Zuckerberg turned down several large offers for Facebook when it didn't have a serious functional business. He could have walked away nearly a billionaire before Facebook had even printed a dollar of profit.
Bill Gates turned away numerous, large acquisition offers in the first ~10 years of Microsoft's existence. IBM was interested in buying them for years.
The Snapchat owners turned down ~$3 billion from Google to go public instead as an exit. Even after the beating their stock has taken in the last few months, the market cap of Snap is $15 billion today.
The difference is at that point Mark had something worth that much money and had already spent several years building it. If he decided in 1 year he was done he could have probably found another buyer at a valuation high enough to retire unless he royally screwed up the company.
Turning down $100mm when you have nothing of value yet is very different imo
