
Silicon Valley Venture Capitalists Prepare for an I.P.O. Wave - raleighm
https://www.nytimes.com/2018/04/15/technology/silicon-valley-venture-capitalists-ipo.html
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walshemj
Cashing out before the crash while the markets will still support IPO's

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rajacombinator
The big question - how much will they get for the vaporco known as uber?

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baron816
Let’s say the company you work for goes public and your stock is suddenly
worth $1,000,000 (as an example). A wise investor, you normally put all of
your other savings into broad market index funds. Now, do you sell your
company’s stock that was given to you and took you four years to vest into, or
do you hold on to it and hope the valuation keeps rising? (This is a
rhetorical question btw)

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mgummelt
If you had $1MM in cash, how much of it would you use to buy the company's
stock?

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rifung
This exactly.

I work at Google and it astonishes me how surprised people are when I tell
them I use autosale, the company program where your stocks are sold
immediately as they vest.

They always ask "Don't you think Google stock is going to go up?" And I always
reply that yes I do think it will go up but

1) that's not the right question to ask, you should ask whether it will go up
more/less than anything else you could invest in with that money

2) My future compensation, both in terms of stock and salary, is already
heavily tied to Google's future performance, so I have even more incentive to
diversify compared with someone who doesn't work there.

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walshemj
Would you not want to sell stock you have held for some time to take advantage
of lower capital gains - or do the US tax authorities assume you are selling
older stock first?

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garmaine
It is taxed as income regardless at the point of vesting.

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walshemj
I think the op was saying that you already owned the stock - that now becomes
worth 1,000,000 and presumably would have paid income tax for the FY when you
vested.

You surly don't pay income tax on the gain of already owned stock but CGT.

Back in the day 2000's I did own stock that was worth over 1,000,000 certainly
wouldn't have had to have paid income tax if we had been bought out at point -
but that was in the UK

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garmaine
This subthread is about selling at point of vesting. Unless you are a founder
with a 86(b) election, when you vest it is income.

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superplussed
Will this result in appreciably more money flowing into the rest of the
ecosystem from the people that are enriched turning into Angel investors? Or
does that only happen with the massive IPOs like Microsoft, Google, et al?

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asabhi
There are some good and some not so good among these companies. Uber is a taxi
company with an app. Cars still cost the same as before to run, drivers still
cost the same as before, all costs are the same as before. So once the
subsidization by VCs stops, Uber rides will be as expensive as any other ride.
Self-driving cars will not save Uber either. There is no network effect with
self-driving cars, and once the technology is ready it will be commoditized,
and Uber will have no advantage.

As a rider, it's great to use it while you can, but there is no actual
business there.

Airbnb on the there hand has all the advantages people like to see in a
business.

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posix_compliant
I disagree. Uber facilitates the process of becoming a driver, therefore there
will be a larger supply of drivers. I believe the price of a fare will
decrease due to the increased competition.

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Retric
Amortization over say 20 fairs per day * 20 days a month * 12 months a year,
reducing the cost by 1 cent per ride per ~50$ dollars in cost savings.
Suggests it's just not a meaningful savings.

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posix_compliant
Where are you getting the 1 cent reduction quantity? My only point was that a
greater supply of drivers could yield a lower price, but I never asserted to
what degree the price would decrease.

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Retric
Increasing costs to add a driver does not prevent company's from adding new
drivers it just makes that more expensive. Thus, you need to consider it as
another form of cost savings not a difference in the number of drivers.

A company that pays 50$ less to get an employee can reduce fairs on the order
of 1 cent or make an extra 1 cent per ride. It's possible Uber might add a few
cents per ride this way, but it's not particularly significant even assuming
the average driver does not last that long.

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allthenews
So how do the "rest of us" profit from these IPOs?

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adventured
Pick the right growth candidate, hold your nose at the valuations, buy and
hold for a few years until the growth catches the fundamentals up. Or wait
until (assuming) the market drops at some point and buy the growth at
dramatically more reasonable valuations. I'd also say buy what you know; that
is, if you have experience with a company and know that their products are
particularly good, providing the company a likely advantage over time assuming
they're well run. I don't know much about Zuora for example (so if I want to
buy it, I'll spend a lot of time on research), but I plan to stalk DocuSign
for a reasonable entry point as I know their products well and I like their
position.

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lgleason
Smells like a bubble....

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elvirs
something tells me all stars are aligning for a huge correction. real estate
prices inflated beyond imaginable while wages bave been stagnant. almost a
decade old tech companies not making any money valued in billions and an
administration made up of moron wages war on issues that have no relation to
the country. something tells me shit will collapse big time in Trump's last
term and everything will be blamed on him and people who voted for him by the
media and the elite. meanwhile the elite will have cashed in on all these ipos
by having dumped overinflated stock of unicorns on middle class. 2020 will be
a hell of a year

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ukulele
The only problem with the "something tells me" line of reasoning is that it's
_always_ being espoused by someone. Literally at any point you can find people
who feel the way you do. Good news is that if you keep it up you'll eventually
be right for a little while.

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balls187
> Good news is that if you keep it up you'll eventually be right for a little
> while.

A broken clock...

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TACIXAT
Pay walled on mobile.

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hitchhiker999
A fine day for corporate. [http://www.connectnowbusinessnetwork.com/wp-
content/uploads/...](http://www.connectnowbusinessnetwork.com/wp-
content/uploads/5.jpg)

