Silicon Valley Venture Capitalists Prepare for an I.P.O. Wave

Re:Silicon Valley Venture Capitalists Prepare for an I.P.O. ... by YZF on Sunday April 15, 2018 @08:22PM (#16845836)

This is absolutely the right way to think about this. However if you have options the situation is different. There may also be tax considerations.

Another variable is whether your personal effort materially affects the outcome for the company. If you think your work will dramatically increase the value of the company you may want to own more stock ... presumably though if this is the case it's already reflected in your compensation (and maybe part of that is stocks/options as well).

The way I tend to think about this is that if you're working for the company you're already invested in it to some degree so from a diversification perspective I'd tend to want to own less stock of the company I work for.

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Re:Silicon Valley Venture Capitalists Prepare for an I.P.O. ... by abalone on Sunday April 15, 2018 @10:07PM (#16846225)

> Another variable is whether your personal effort materially affects the outcome for the company.

Well no, the question supposes you work for the company in either case. If you held $1M in cash, would you invest it all in the company you work for because maybe you can affect the outcome? If not then probably you shouldn't hold onto $1M in equity... if you're perfectly rational that is.

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Re:Silicon Valley Venture Capitalists Prepare for an I.P.O. ... by jjeaff on Monday April 16, 2018 @12:39AM (#16846707)

There is one reason that it might behoove you to keep everything invested in the company you work for.

It may be that you have insider information that no one else knows.

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Re:Silicon Valley Venture Capitalists Prepare for an I.P.O. ... by YZF on Friday April 20, 2018 @12:12AM (#16882106)

Technically if you buy the stock based on insider information you're breaking the law. If you get stock and don't sell it I don't see how that can be considered insider trading...

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Re:Silicon Valley Venture Capitalists Prepare for an I.P.O. ... by jjeaff on Saturday April 21, 2018 @02:21PM (#16892559)

Yes, which is why I said "keep" the stock. If you're buying and selling based on insider info, you could be in trouble (thought unlikely as an employee that isn't an executive).

But no one could be prosecuted for just not selling stock they receive as compensation.

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Re:Silicon Valley Venture Capitalists Prepare for an I.P.O. ... by abalone on Monday April 16, 2018 @01:42PM (#16851010)

That's fine. The question is not "are there good reasons to invest in your employer." It's "are you rational enough to treat $1M equity and $1M cash the same."

Also, it is uncontroversially a bad idea to invest "everything" you have in one company.

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