LivingSocial: Employees' and Founders' Common Stock Now Worthless

Re:LivingSocial: Employees' and Founders' Common Stock Now W... by drusenko on Thursday February 21, 2013 @10:45AM (#5258032)

I would be surprised if even 25% of those startups had a meaningful exit. But even at 25%, we're a very long way from the lottery odds -- that comparison always strikes me as quite misleading.

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Re:LivingSocial: Employees' and Founders' Common Stock Now W... by hapless on Thursday February 21, 2013 @01:14PM (#5258977)

As repeatedly mentioned, a "meaningful exit" can make the founders extremely rich, and pay employees the equivalent of a routine annual bonus at a normal firm. ($5k-$25k)

Candidates have no way to evaluate the value of the equity pressed upon them, but even in the case of a successful exit, it's usually quite small.

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Re:LivingSocial: Employees' and Founders' Common Stock Now W... by confluence on Thursday February 21, 2013 @01:16PM (#5259000)

Depends on your definition of meaningful exits, actual number of meaningful exits, and dilution between rounds.

Indeed if you put a margin of safety on valuing any arbitrary startup before they get traction - EV does hit on or near zero.

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