Finbarr

Yes and optimism bias leads people to believe they won’t experience those negative events. Everyone must believe they are going to do better than the median outcome when they start a company.

Not necessarily true. Most control is exerted at the board level through board director seats. You can have a low % and a majority of board director seats, depending on the leverage you had in each round raised.

At an early startup, your execution has a meaningful impact on the outcome. This isn’t true for craps. It may be for poker, though.

> some evidently better than yours as they don’t require this intervention.

I’m not sure where that’s coming from.

Also plenty of companies out there have control past the A.

The 90 day exercise window is the most obviously broken thing about startup equity in my opinion. We changed this to 5 years at Shogun.

First of all, we're on the same page about the risk profile of working for larger companies being better for employees. But the reality is there aren't enough of those jobs for every single startup employee out there to get one. Some people also like the startup environment - move fast and break things, etc.

Your denominator (5000) is _all_ investments that YC has made. You need to look at investments of a certain vintage, e.g., 10 years or more. You also need to include all the other companies of that vintage where employees did well (way more companies in that cohort have sold or gone public). The result is 0.06% is a gross understimation of the success rate (where success is defined as successful enough for early employees to make a lot of money).

Your daily reminder of the importance of maintaining board control.

Many huge private companies, like Stripe, have found ways to provide liquidity to their employees without going public, e.g., through tender offers. Some more recent examples of companies where early employees did very well would be AirBnB, Coinbase and DoorDash.

Let's not forget that FAANG companies were all startups at one point. Early employees at those companies experienced significant upside. Startups can be very high risk, and in rare cases, extreme upside.

That very much depends on the stage of the company and how much control has been given up at different points. Do you think the management team of a public company could just decide to shut it down? As you raise consecutive rounds, your control is eroded.

It is very common and usually a condition of closing. Investors know that preferred is way better than common. They are buying highly speculative assets and want strong downside protection.

Nobody is forced to become a founder. A lot of people are naive to the sheer level of stress involved, and think it’s going to be easier than it actually is. You don’t find out just how stressful it is until you’re already super committed, have raised money, have employees, and there’s no easy way out without screwing a whole bunch of people over.

Founders tend to only talk about the good things happening at their companies, and tech press tends to focus on the successes. These things contribute to more people starting companies.

I didn’t comment on whether it was a good reason or not. My comment was just highlighting some of the complexities in what the blog author was hoping to achieve.

Hiring, firing, layoffs, making the wrong decisions with limited information and not finding out they were wrong until years later, huge shifts in the tech market around you undermining your business, competitor actions wrecking your business, pressure from investors, pressure from your family to earn more money, uncertainty about whether the business will ever succeed, and an endless list of other things.

> You don’t lose any money if your startup fails.

Except all the money you lost by not having a proper job along the way. Also it’s not uncommon for founders to float the company at early stage until investment is raised, and they don’t always get a refund for this.

Yes, as I mentioned it only applies when you have 10 sellers.

The bigger secret is that stock sold in secondary sales by founders and employees is usually common stock, and the purchasers will often get the right to convert this to preferred stock. This means that the company is instantly encumbered with a greater liquidation preference, without the increase in balance sheet to offset it.

Secondary at Series A is very rare. Part of the reason more early employees don't get included in secondary sales is because of the Securities Exchange Act of 1934 14e-2. If you have more than 10 sellers involved, the transaction can be considered a tender offer, which triggers additional regulatory requirements and disclosures.

> As of 4 months ago I left a very successful stealth startup (which grew to 40M in ARR in two years) to become a founder and that is when it clicked - I expected to feel stressed, pressured, and the weight of all of the risk I was taking.

Please let us all know how that's working out for you in 5-10 years. 4 months in and no stress? Must be easy riding from here!

> OpenAI says that multiple technical and policy experts, including Aleksander Madry (head of preparedness), Lilian Weng (head of safety systems), John Schulman (head of alignment science), Matt Knight (head of security), and Jakub Pachocki (chief scientist), will also serve on its new committee.

Sure- the happy case with VC is that companies raise and spend the money to make more. The reality case is that many companies struggle to do that, and will burn a ton of money in the process, making the liquidation preference much more painful.

You can also get a carve-out of the deal proceeds.

1x non participating is still the standard in most venture deals for companies doing reasonably well. But every dollar spent by startups essentially builds the preference against them. If you raise and don't spend the money, the balance sheet can be used to "offset" the liquidation preference in a sale.

Of course. Because that's infinitely better than:

  $(el).toggle();

This is incredible and such a great ad for jQuery. It's almost as if the creator(s) built that site ironically. So many examples are way clearer and easier in jQuery, like this one:

  JQUERY:
  $(el).toggle();

  IE8+:
  function toggle(el) {
    if (el.style.display == 'none') {
      el.style.display = '';
    } else {
      el.style.display = 'none';
    }
  }

Gotta love that "modern" triple attribute repetition.

From: https://youmightnotneedjquery.com/#toggle

Hopefully Sam and Greg get restored to the board also.

Except MSFT does have access to the IP, and MSFT has access to an enormous trove of their own data across their office suite, Bing, etc. It could be a running start rather than a cold start. A fork of OpenAI inside an unapologetic for profit entity, without the shackles of the weird board structure.

Context windows can't contain all data... yet.

It took a little finagling but ChatGPT is actually a very good interface to Goodreads: https://chat.openai.com/share/b460a929-4e70-4bfd-bd12-e61e78...

The YC Continuity team did amazing work helping me and many other later stage founders. I’m sad to read this news.

YC is best known for their early stage investing. But Ali, Anu and the team created some excellent programs for later stage companies as well. Shogun benefited from the Series A program, Scaling from A to B program, and the YC Growth program. I wonder what’s happening with all of those initiatives.

Through these programs and the direct support and mentorship from the Continuity team, we learned a ton and significantly scaled our startup.

Wishing all of the affected team all the best.

Reminds me of a wall clock in my high school physics class that would struggle to pass 5 o'clock and ticked backwards and forwards a few times on its rotation through each minute, despite keeping good time. Its struggle through each minute reflected my own struggle through each minute in that class, however.

Imagine reading a document like this with "United States of America v Your Name" at the top. It would be terrifying. These charges are serious and SBF is going to go down for a long time if convicted.

There's also a forfeiture section in the federal indictment that demands forfeiture of all any and all property that is traceable to the commission of the offences.