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I kind of don't understand this post.

Surely Twitch is an example of the 1%, not the 99%?

Not that I disagree with the end sentiment - I'm currently at a startup that was acquired as part of the 99%, but I don't think this is the most effective person to be saying this.

Twitch is surely an example of the 1% now, but he's saying that you may not be at that point yet and still have a great startup, regardless of what you are valued at, at this moment.

Right. He's saying that Twitch is a 1%-er now, but even 9 months before their deal they were in the 99%, aka VCs are clueless sometimes.

What's interesting is that they had already raised $42M at that point (according to comments here).

Certainly raising $42M and having an over-$100M valuation already put them in the top 1%, right?

> Certainly raising $42M and having an over-$100M valuation already put them in the top 1%, right?

No, it put them in the top .1%.


But even then, as a founder selling some of your own stock to a VC is not easy.

The reasoning behind this is twofold: first the VC wonders if the founder wants to set aside some money for themselves in case things go belly up, in other words, does the founder do this as an insurance premium? (Answer: yes, and why not, why should founders be always stuck with risk). Then the second: ok, so we'll make this guy 7 figures rich, what if he doesn't show up next Monday or absconds to Tahiti?

These and other (minor) fears are reasons why VCs are skeptical about deals where founders cash out (even partially) before they (the VCs) do.

Whether that is just or not is up for debate, I think VCs are well within their rights not to do deals, at the same time when you've been in the traces as long as Justin has (I've followed their story right from day 1 because we were in some ways a competitor) a bit of goodwill would be appreciated and I can see a couple of ways in which such a deal could be structured where most of the fears would be laid to rest. Still, it's an arrangement between consenting adults and if there is no consent then there is no deal.

That's tough but that's a trap that many founders are caught in, they have the stock but they don't have the liquidity and there is no market for their shares where they can get a chunk of cash 'just in case'. (pun intended).

Exactly, the 99% would be someone like Appointment Reminder by Patio, or HitTail, or some bootstrapper that grinded it out for many years without funding, external validation, or connections.

No, it is simply very hard to make the call.

Sometimes it's hard to make the call. Sometimes VCs are just stupid.

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