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mikert89 1 days ago [-]
Quick equation:
1. is it an ai lab with a well know founder -> equity might be worth something
2. are you the CEO founder? -> equity might be worth something
3. are you a non CEO co founder? -> equity might be worth something, will probably be stolen from you
4. is the company a year or two from a certain IPO? equity might be worth something
5. all other cases likely zero
apparent 24 hours ago [-]
Seems like 3 is a bit pessimistic. After all, if there are 3 founders then that greatly decreases the chance that the CEO steals equity from the other 2 cofounders. The CEO generally wouldn't have > 50%, so the non-CEO co-founders could keep the CEO in check.
jagged-chisel 19 hours ago [-]
Seems accurate according to my experience. It’s the new investment banks in later rounds that cause it. Bigger investments, stronger guarantees, better preferences, and lack of understanding on the part of inexperienced founders, plus lack of power held by the employees options pool … recipe for “only the banks see any upside.”
mikert89 12 hours ago [-]
alot of financial engineering happens if the company is raising large rounds, if you leave early as a cofounder, they will absolutely mess with your equity. And even if you are there, youre considered an expense, unless the CEO explicitly advocates for you
mikert89 15 hours ago [-]
its so common that I am shocked people willing enter roles like co-founding CTO without serious legal protections in place. go spend time in NYC/SF and talk to actual cofounders
dnnddidiej 20 hours ago [-]
Is there even a CEO per-se in this situatuon?
deaux 19 hours ago [-]
Depends on country and type of business entity. Some of them require one legal representative.
SilentEditor 17 hours ago [-]
This is a clever way to make a dry, high-stakes topic actually approachable, and the game framing makes equity tradeoffs much easier to internalize.
How did you decide where to simplify versus stay financially accurate, and were there any startup-equity edge cases you intentionally left out because they made the game less intuitive? :)
iliabara 1 hours ago [-]
Hey thanks!
There are a ton of edge cases, but the goal was to serve as an intro, and to get a grasp of the basics.
Links in the intro to a more serious look at things.
tailscaler2026 1 days ago [-]
It doesn't understand authorized vs issued shares
iliabara 31 minutes ago [-]
In practice, for YC or similar Bay area US startups, they are the same.
All authorized shares are issued, and then the charter is amended through board action and more shares are authorized and issued at each stage.
jmward01 1 days ago [-]
SaaSyCryptoAI - Leverage our custom AI driven backend to mint your own coin! Seriously though, great little lesson. It would be nice to factor in internal raises and a bit of granularity for when exercises happened to see final payouts and similar bonus topics but I would recommend this to anyone thinking about taking a job with options involved.
nerdsniper 1 days ago [-]
Add the effects of "preferred overhang" on employee payouts for various different exit outcomes like acquisitions. Usually only founders and investors with "preferred shares" see anything and those with common stock (employees) see theirs get completely eaten by the overhang.
iliabara 1 hours ago [-]
Depends on the outcome.
If it's a positive outcome, then preference has no role.
This game models good outcomes, with warnings for things like down rounds
fermatf 15 hours ago [-]
Useful! I like playing such games where u simulate something from real world so you get playground to do mistakes.
iliabara 1 hours ago [-]
Thanks! :)
opengrass 1 days ago [-]
Thank you for python anywhere, I will add that to my chasm of free hosters.
iliabara 1 hours ago [-]
Ya for sure, and even paid account is very cheap, few dollars a month
jagged-chisel 1 days ago [-]
Yeah, that’s not how my company operates. I’m maintaining my majority share by splitting only. The VCs can go along, or they can hope their next investment is the unicorn.
withinboredom 1 days ago [-]
Yeah, also seems very US-centric with "outstanding shares". Other countries don't allow you to have outstanding shares. Also, where is the "reinvest" option during series rounds. Like, what founder also doesn't reinvest to keep their equity during fund raising?
iliabara 1 hours ago [-]
This is US centric, it's mentioned on the first page, along with the notes and links.
Reinvesting is a minority, edge case. I can't think of a single VC company in the Bay area that can have founders reinvest shares and not cause issues raising.
jiveturkey 1 days ago [-]
so many erroneous statements in this game. also it's not much of a "game", is it.
iliabara 1 hours ago [-]
Ya, I'd appreciate pointers if there are errors :)
1. is it an ai lab with a well know founder -> equity might be worth something
2. are you the CEO founder? -> equity might be worth something
3. are you a non CEO co founder? -> equity might be worth something, will probably be stolen from you
4. is the company a year or two from a certain IPO? equity might be worth something
5. all other cases likely zero
How did you decide where to simplify versus stay financially accurate, and were there any startup-equity edge cases you intentionally left out because they made the game less intuitive? :)
There are a ton of edge cases, but the goal was to serve as an intro, and to get a grasp of the basics.
Links in the intro to a more serious look at things.
All authorized shares are issued, and then the charter is amended through board action and more shares are authorized and issued at each stage.
If it's a positive outcome, then preference has no role.
This game models good outcomes, with warnings for things like down rounds
Reinvesting is a minority, edge case. I can't think of a single VC company in the Bay area that can have founders reinvest shares and not cause issues raising.