Ask HN: Sell or Ride It Out?

[quefounder]

Hi All - I was hoping to get some advice on a situation that I am conflicted with.

Myself and another woman started a company 5-6 years ago. About 2 years in - we couldn't work together as I moved states and working remote was too hard so I walked away from the business. I had vested some shares, but walked away from most. It was acrimonious.

She continued to the run the company and raised a few more rounds of funding. We haven't spoken since, I get minimal updates, just things related to funding rounds. I have no idea on the financial status of the business.

The last round was completed a week ago and I got an email from an existing investor with an offer to buy my shares at the valuation of the round that just closed. It is a decent amount of money, one that would put me in a much better financial position.

I feel in a huge lose lose situation. Either I take the offer and the shares end up being worth more and I will have left money on the table or I don't take the offer and could end up with nothing.

Does anyone have any advice?

[greenyoda]

> I feel in a huge lose lose situation. Either I take the offer and the shares end up being worth more and I will have left money on the table or I don't take the offer and could end up with nothing.

It's also possible that you could take the money that's being offered today, and the company goes out of business tomorrow. In that case, you'd have won big.

If it were me, I'd be happy to take the sure money rather betting on the future of a startup. The odds of a startup becoming a unicorn are very small. Do you think your ex-partner has unique talents that would guarantee her success? What if a well-funded competitor entered the space?

[troydavis]

Accept that you don’t have any special knowledge of or ability to influence the company’s future value. Given that, it makes no more sense to have a lot of your net worth tied up on this company than to put, say, 50% of your net worth in Google stock or some random smallcap stock.

Diversify, not because the company might or might not be worth more in the future, but because participating in that bet - trying to predict the future without any unique information - is dumb. If you currently had cash instead of this stock, you wouldn’t invest all of it in one smallcap stock… so don’t.

More background on this: https://www.wealthsimple.com/en-us/magazine/data-diversifica.... This company is wheat.

Feel free to keep some portion of the stock (perhaps 5% of your current position?), as long as it’s the amount you’d go out and buy with cash if you could. Don’t keep it merely because you currently own it.

[armatav]

If you desperately need something out of that money, sell. If you don't desperately need it, don't sell. If you need a small amount of money, sell some of it.