Secret aside, if you think "Founders took money off the table and then company crashed!" is a WTF, let me explain the deal VCs get.
-
-
Replying to @patio11
VCs, like hedge funds, charge a management fee and a carry, often described as "two and twenty" due to cartelesque pricing decisions.
2 replies 2 retweets 5 likes -
Replying to @patio11
The management fee -- traditionally 2% -- is a yearly charge based on the fund's size. VCs generally get it regardless of fund performance.
1 reply 2 retweets 6 likes -
Replying to @patio11
Every professionally funded startup in history, including the ones which flamed out ingloriously after showing early promise, generates fees
1 reply 3 retweets 11 likes -
Replying to @patio11
Management fees are negotiated between sophisticated adults who understand the risks. Only new thing about cashouts is founder now at table.
6 replies 2 retweets 4 likes -
Replying to @corywilkerson
@corywilkerson If you're a VC, managing limited partners' money and making investments from it, yes, this is standard and customary.1 reply 0 retweets 0 likes -
Replying to @corywilkerson
@corywilkerson Founders generally get salaries. Less frequently, but more common now, they sell founder stock in a "secondary sale."1 reply 0 retweets 1 like
@corywilkerson Most investments trade company's shares for money given to company. Secondaries trade founder's shares for money to founder.
Loading seems to be taking a while.
Twitter may be over capacity or experiencing a momentary hiccup. Try again or visit Twitter Status for more information.