I've considered this model before. Redistribute some % of fund carry to founders who don't have good exits. The goal is similar to having founders take $$ off the table in later rounds: encourage risk-taking and swinging for the fences w/some safety net if things don't work out.https://twitter.com/zackkanter/status/1065436575738281985 …
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FWIW it's hard to make numbers meaningful. Ex: - $50m fund, 35 investments - 3x return -> $20m in carry - Allocate 20% to founders in bottom 60% of companies - Assume 2 founders/co --> ~$100k per founder BUT that's ~10 yrs after they started co, and 3x fund isn't an easy target.
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Replying to @lpolovets
That’s the same conclusion I reach every time I consider this model. You can’t cover the opportunity cost of not taking the PM job at Google (or come close to it).
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Replying to @patio11 @lpolovets
A thought I’ve had is instead having a fund (or accelerator or similar) set up as a risk pool for private long term disability insurance and term life insurance. Should be cheap and especially for LTD probably actually easier to get for 70 founders than for 2.
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Replying to @patio11 @lpolovets
The mortality rate of funded founders is very close to zero but it is not actually zero. Although getting life insurance should be close to trivial I will bet that most people who are young and healthy don’t organize to actually do it.
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I have, regretfully, specific knowledge of one pass-the-hat situation for a young family in a very trying time for them, and I have precommitted to telling every founder I ever talk to that nothing in the business is more pressing than 10 year term life.
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