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What makes you think the residuals would fare better than the options? The risk is about the same, yes?
by francoisdevlin 3y ago
What makes you think the residuals would fare better than the options? The risk is about the same, yes?
- nfriedly 3y agoMy intuition is that residuals have a higher chance of a low payout, whereas options have a lower chance of being worth anything, but probably a higher value if they do pay off.
- lazide 3y agoResiduals for a company which is bankrupt would be zero - same as their stock price. Also, they could just rewrite the sections of code that are expensive and nuke their costs and your residuals at any point. Unlike a brand or whatever, it’s trivial to redo as it’s not user facing.
- deleted 3y ago[deleted]
- ganoushoreilly 3y agoI’d agree, especially if they’re relying on VC funding to power through growth.
- coffeemug 3y agoNo because with options you may have to wait for your liquidity event forever.
- lazide 3y agoIf you think any sane founder is going to pay out on ‘residuals’ of any significant amount without a similar liquidity event, I’ve got a bridge to sell you.