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
What about a health insurance purchaser and pool? I don’t know much about health insurance for startups, but I assume it’s expensive and a huge pain (in the US anyway)
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Complicated topic, but broadly: is expensive, is a core part of comp for professional employees, funded companies going to need it for employees regardless, and taking founders of of company’s pool may decelerate their ability to hire. So might not be the first thing to try.
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