Friend of mine left MSFT back in the early 2010s for a startup that is set to IPO in the next year or two if all the prevailing winds remain relatively similar.

He'll do pretty well in the IPO because he has some of those early enough options as one of the first 25ish employees.

BUT!!!He left MSFT at $30-40ish a share, now worth $240 a share. Unfortunately, he divested most of it into more general index which has been fine, but not 6x.

He would have EASILY covered whatever money he's likely to make in the IPO by just staying at Microsoft and holding company shares for the last 9 years, and in fact probably would have made way more given stock rewards/promotions/salary increases etc.

That being said, he has enjoyed working at the startup and it has propelled him into a role that he wouldn't have been in at MSFT or any other big company so there is that to consider as well.

Investing in the right single stock always outperforms the index. But risk adjusted returns may not be better than a diversified portfolio, Microsoft could also have dropped due to some scandal whereas the downside risk of a balanced portfolio is much smaller.

Absolutely, and him and I both know this, but... I still like to remind him of it (only because we're close enough to prod each other like this).