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Comment by hinkley | Hacker News Reader

An IPO is where the investors cash out to spend money on something else. It’s where the founders and early employees get rich enough to start chasing other interests, or just retire outright.

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My understanding is that the underwriting bank and early investors and institutional investors win first, then founders, after that early employees. Usually offloaded onto the robinhood crowd who excitedly buys in.

Employee shares usually get put in a 3-6 month lockdown so they don't get to participate in the bubbly robinhood excitement.

It's also often also part of the employee retention plan. If you discover your boss has lied to you shortly after an IPO or a merger, then odds are good they were trying to hold onto you by any means necessary until their bonus was paid out.

I've had several people I trusted destroy our relationship this way over the years.

The s1 lays out the exact schedule and let me tell you it is not a normal schedule. Is that a surprise anymore though?

Oh wow, I looked it up. Employee's get to sell up to 10% on day 1. That's cool for them.

According to this analysis of Anthropic's S-1, the founders own about 10% of the company, which at $2T valuation would mean they each make about $28B. The employees collectively own about 15% which results in some staggering math - thousands of employees making ~$100M each, even those hired as recently as last year.

These are averages, but still!

https://x.com/AndrewBenson/status/2115458726396310008

Jesus. Why doesnt every man, woman, dog, chat and child work at Anthropic right now?

I was on my way but the train broke down again!!

Don't we, though?

Yeah - maybe we get a free token on IPO day.

In contrast, back when RedHat went public they reached out to everyone on the open source mailing lists, and gave everyone a few shares as thanks for the work they were benefiting from. I got some shares even though all I had done was post some free video format converters.

Because if we did, we'd each get about 1000 bucks.

You do understand how individual slices decrease in size as you divide the pie more ways, right...?

That’s a rather astounding amount of cash to have extracted per capita.

It truly is. And, looked at that way, it is an indictment of the systems that allow this, and yet another piece of incontrovertible evidence that we need to change those systems to bring money, and power, back from the ultra-mega-wealthy to the populace at large.

It just, y'know, isn't a good argument for having everyone work for Anthropic ^_^

In general I’d agree with you but where else would you go to take the money that’s more exciting than the forefront of AI in the world? Retirement makes sense, though if they wanted to retire they all could and own multi-million dollar homes and do so now, pre-IPO. Post ipo I guess you get a few super yachts and some land in Hawaii? Idk at a certain point I think these guys like the chase more than the result.

That certainly comes with the territory. However, being a public company offers a lot of opportunity for the company - easier access to capital, to enterprise/government contracts, and attracting talent that want less risky compensation.

IPO = exit for a lot of people

Initial Position Offload

There's also a pretty big morale hit for the people who fall below the remuneration cutoff of peers they are almost as good as or feel they are better than. I've seen a few different people lose almost all of their fucks because some dweeb is buying fancy cars and they're still paying their mortgage every month.

Counter-examples: Amazon, Microsoft, Google, nVidia

That was a different time and that’s a very small sample of survivor bias.

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