Tell HN: Sell your startup shares while you can
I’ve extracted $400,000 as a SaaS company employee by selling on secondary markets. My colleagues extracted $0 because they thought shares would be worth more “soon”. It never did and they are still waiting.
When I joined this company I knew nothing about stock options. And I would not care because the job itself was so satisfying. Then I started to wonder about them, thinking I could be a millionaire.
But a colleague told me “Stock options are a lottery ticket, nothing else. And you can only sell them at liquidity events”. WTF is a liquidity event? That’s when your shares are liquid, meaning you can maybe turn them into $. Sometimes companies will organize liquidity events but this is rare.
A lottery ticket? I am never gonna make money I thought.
A few years later, an existing investor reachs out: “we want to buy shares from your employees at $x per share”.
Let’s pause for a moment. Unless you’re already a millionaire, the risk of not selling your shares is very high in this situation. Yes, maybe your company will reach IPO (most probably they will not) but there is someone in front of you offering a lot of cash for your shares: SELL.
Still because the company was doing well, people started to say “yeah well the shares will be much more soon, I won’t sell”. Major mistake.
I sold and made a few hundred thousands.
I did that three times in total, at two different companies. Every year the stock price goes down and people are still waiting for it to go up before selling.
Stop thinking about the millions you will never have, and start thinking what you could do with $20,000 $50,000 or $100,000 more this year.
If there’s an opportunity to sell, sell. If there’s no official opportunity, reach out to secondary markets like equity zen, forge global, or even existing investors. You may not always be allowed to sell, but you should still try.