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
Doesn’t have to be strictly higher EV than PM at FAANG. Just enough to not be destitute. Still get more at the margins to start cos.
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Or: you’re satisficing with this model, not optimizing.
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Failure at a funded startup shouldn’t lead to personal destitution, since you have a middle class salary immediately after the funds clear. (Some founders forgo a salary or underwrite it if the company is going out of business. These are mistakes and we should discourage them.)
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