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Comment by noahc | Hacker News Reader

It allows founders to take money off the table without selling out to a company who would have interests other than growing github.

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How does that make sense for the VC though? They're not in the business of cashing founders out.

Presumably the founders are committed to growing the product line and potentially creating a new publicly traded developer tools company.

One senerio would be give the founders enough that if they swing for the fences and strike out they still have enough. This aligns incentives and removes risk from founders.

In addition, if founders want to take cash off the table and that is what it takes to make a great investment in github you do it.

As far as I know GitHub is very profitable. I'm sure they have taken plenty of money off the table as dividends already.

They can sell some of their shares to private investors. A VC expects to earn many times their money on the investment... which requires dramatic and risky expansion of the business.

Private investors of all types have their own problems. Everyone from the local angel group to friends and family to private equity firms all have advantages and disadvantages.

A VC wants 10x, I see no better way to allow this than to let a founder take some money off the table and shoot for the moon.

As far as risk is concerned with expansion, as long as the founders and the VC want the same outcome I dont see what the big deal is with taking on more risk, particularly for founders with other peoples money. Even better after theyve taken money off the table!

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