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At the time he attempted to sell his shares, Twitch had raised $42 million, and had been valued at around $100 million several months earlier [1]. He is complaining about the gall of VCs not to buy his shares at a price that would imply a valuation of less than $194 million (and presumably not that far below). I do not believe that this is a good attitude for entrepreneurs to internalize.

[1] https://www.pehub.com/2014/08/amazon-pays-970-mln-for-twitch...




His sentiment is worth much more than the raw numbers.

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.


No, that's not why no deal happened. I suspect it was because he was not raising money but because he was selling some of his own shares. In other words: he was trying to take some money of the table. And those are very hard deals to close.

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.


about 80% more

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.


You're absolutely right, what was I thinking. Need to sleep more and more regularly.

> 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.


Playing in the NBA a very, very hard thing to do. As a player, you look around and all you see are highly paid athletes in the media. On the other hand, trying to secure a lucrative contract extension can lead to rejection. The passion and tenacity to fight through this negativity in order to feed your family is what Latrell Sprewell is trying to elicit. [1]

[1] http://www.si.com/vault/2004/11/15/8191994/getting-by-on-146...


> Twitch had raised $42 million, and had been valued at around $100 million several months earlier

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".




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