<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>neilv</author><text>&amp;gt; &lt;i&gt;If a founder cashes out 10% of their position for $500k @ $25M Series A valuation, that de-risks a lot of their personal life. But when the startup ends up selling for $250M, that $500k of &amp;#x27;early&amp;#x27; selling would have been worth $5M (less any dilution between rounds) - hard not to regret the choice in that case even if hedging is going to be the correct choice 99% of the time.&lt;/i&gt;&lt;p&gt;IMHO, it&amp;#x27;s &lt;i&gt;very easy&lt;/i&gt; &lt;i&gt;not&lt;/i&gt; to regret, with those particular numbers.&lt;p&gt;I&amp;#x27;d take $500K now plus possibly $45M later -- over $0 now and possibly $50M later.&lt;p&gt;I&amp;#x27;d take that deal even if &amp;quot;possibly&amp;quot; were &amp;quot;guaranteed&amp;quot;.&lt;p&gt;(Who might regret that is a founder who was otherwise already wealthy.)</text><parent_chain><item><author>corry</author><text>Three interesting part of the discussion:&lt;p&gt;(1) The opportunity cost to the founder of taking early liquidity:&lt;p&gt;If a founder cashes out 10% of their position for $500k @ $25M Series A valuation, that de-risks a lot of their personal life. But when the startup ends up selling for $250M, that $500k of &amp;#x27;early&amp;#x27; selling would have been worth $5M (less any dilution between rounds) - hard not to regret the choice in that case even if hedging is going to be the correct choice 99% of the time.&lt;p&gt;(2) Meaningful vs. not-meaningful amounts:&lt;p&gt;From my prev example, the founder sells 10% of their position for $500k. Well, if all employees were allowed to sell up to 10% of their positions too, would that even matter to them? If you were an employee and had $200k total value in your options, and you could sell 10%, you&amp;#x27;re getting $20k. Not really enough to de-risk your life although still might be welcome (and employees would appreciate having the choice).&lt;p&gt;(3) Sellers need buyers:&lt;p&gt;In order for there to be a seller of shares, there needs to be a buyer. The founder is effectively choosing his buyer and future business partner by taking investment and choosing to give that buyer more control over the corp by selling him even more shares (his personal shares). The buyer wants to make the founder happy and de-risk their downside so they can be more aggressive or big-picture or whatever, plus is happy to own more of the company assuming it&amp;#x27;s a hot round.&lt;p&gt;But what does the buyer want to achieve by purchasing the employees shares? Just to own a little bit more % of the corp? For amounts that might not even matter for the employees and may de-incentivize them?&lt;p&gt;It&amp;#x27;s all very complicated and perhaps there are nuances that make every situation unique.</text></item></parent_chain></comment><story><title>Silicon Valley&apos;s best kept secret: Founder liquidity</title><url>https://www.stefantheard.com/silicon-valleys-best-kept-secret-founder-liquidity/</url></story>
<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>ipsento606</author><text>&amp;gt; hard not to regret the choice in that case even if hedging is going to be the correct choice 99% of the time&lt;p&gt;in the scenario you outline the founder sells the remaining 90% of their position for $45MM?&lt;p&gt;I don&amp;#x27;t think many people would experience any real regret at &amp;quot;only&amp;quot; getting $45.5MM instead of $50MM, due to declining marginal utility of money</text><parent_chain><item><author>corry</author><text>Three interesting part of the discussion:&lt;p&gt;(1) The opportunity cost to the founder of taking early liquidity:&lt;p&gt;If a founder cashes out 10% of their position for $500k @ $25M Series A valuation, that de-risks a lot of their personal life. But when the startup ends up selling for $250M, that $500k of &amp;#x27;early&amp;#x27; selling would have been worth $5M (less any dilution between rounds) - hard not to regret the choice in that case even if hedging is going to be the correct choice 99% of the time.&lt;p&gt;(2) Meaningful vs. not-meaningful amounts:&lt;p&gt;From my prev example, the founder sells 10% of their position for $500k. Well, if all employees were allowed to sell up to 10% of their positions too, would that even matter to them? If you were an employee and had $200k total value in your options, and you could sell 10%, you&amp;#x27;re getting $20k. Not really enough to de-risk your life although still might be welcome (and employees would appreciate having the choice).&lt;p&gt;(3) Sellers need buyers:&lt;p&gt;In order for there to be a seller of shares, there needs to be a buyer. The founder is effectively choosing his buyer and future business partner by taking investment and choosing to give that buyer more control over the corp by selling him even more shares (his personal shares). The buyer wants to make the founder happy and de-risk their downside so they can be more aggressive or big-picture or whatever, plus is happy to own more of the company assuming it&amp;#x27;s a hot round.&lt;p&gt;But what does the buyer want to achieve by purchasing the employees shares? Just to own a little bit more % of the corp? For amounts that might not even matter for the employees and may de-incentivize them?&lt;p&gt;It&amp;#x27;s all very complicated and perhaps there are nuances that make every situation unique.</text></item></parent_chain></comment><story><title>Silicon Valley&apos;s best kept secret: Founder liquidity</title><url>https://www.stefantheard.com/silicon-valleys-best-kept-secret-founder-liquidity/</url></story>