Raising a round is a very very hard thing to do. As an entrepreneur, you look around and all you see are the 1% in the media. On the other hand, the fundraise feels like you go door to door getting your idea shot down by everyone you talk to. The passion and tenacity to fight through this negativity is what Justin is trying to elicit.
This is the key line:
> I tried to sell some of my shares in a secondary transaction at less than a fifth of that price – and I was turned down by every VC I asked.
So, he eventually actually made more on those shares, about 80% more and lucked out. But there is no way of knowing what would have happened in an alternatively universe where some VC would have bought a chunk of stock from Justin. Maybe then this deal would have never happened. You don't get to play twice, but it's nice that it all worked out so well for him.
Correction: at least 5x more.
Also: obviously I don't know the full context about this particular deal, but it always seems a little sleazy to me when still-involved founders sell in a secondary without making that deal available to the rest of the owners.
> it always seems a little sleazy to me when still-involved founders sell in a secondary without making that deal available to the rest of the owners.
Well, that depends. If the founders have laid everything on the line for a really long time then I can imagine taking some off the table so you don't have to go back to work in your dads garage if things go badly wrong. If someone is past their vesting period and they own the stock free and clear they should be able to sell it if there is a market. Other stockholders will have these abilities as well (assuming there are no limitations or shareholder agreements to the contrary).
Usually the rest of the stockholders would have an option to purchase the stock at the price agreed between the founder and the outside party anyway, and if there are drag-along clauses then the buyer might find himself forced to buy from many parties.
It all depends on what the papers say and what kinds of shares there are.
WTF? The Twitch case is nothing like what 99% of entrepreneurs face.
$42M? Try having $42 in the bank and then saying "haters gonna hate".