An angel investor who owns 1% of a company and an employee who is offered 1% of the company are not not not in materially similar positions.
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Replying to @patio11
This feels to me like something you engineers might not understand so I guess I have to shout it from the rooftop.
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Replying to @patio11
First example: vesting. The thing represented to the employee as "ownership" is actually "ownership contingent on you being here in 4 years"
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Replying to @patio11
An employee can be fired at will (typically), loses 100% of equity of that happens in first 12 months. There is no way to remove an angel.
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Replying to @patio11
Investors have a variety of rights w/r/t firm, including information rights. 1% angel prob knows cap table, revenue, impending biz sale, etc
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Replying to @patio11
Angels get preferred stock, often with minor preference. Workers get common. Common worthless in a variety of failure-case liquidity events.
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Replying to @patio11
Investors have a portfolio because they know most companies will fail. Employees very rarely have 10 equity grants active at once.
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Replying to @patio11
An angel who hits jackpot and invests in e.g. Twitter has many early options for getting liquid. Employees often golden-handcuffed to firm.
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Replying to @patio11
This was an actual thing with Twitter pre-IPO: early employees couldn't afford tax bill if they left and exercised options, had to wait yrs.
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A biggie: stock deals are complicated. Angels get competent legal advice. Everyone expects this. An employee who lawyers up is distrusted!
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Replying to @hkmurakami
@patio11 (to clarify, I mean that the same person who would scoff at an engineer hire lawyering up would be ok about a VP sales doing same)0 replies 0 retweets 0 likes
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