Chapter
The importance of preferred shares
54:29 - 1:02:15 (07:46)
Without preferred shares, founders could liquidate a company without regard for investor returns. Founders also have unique tax advantages, but investors should be wary of unrealistic ARR projections in determining company value.
Clips
The possibility of achieving a billion-dollar ARR (Annual Recurring Revenue) may not be as feasible as some founders and investors may think.
54:29 - 58:17 (03:48)
Summary
The possibility of achieving a billion-dollar ARR (Annual Recurring Revenue) may not be as feasible as some founders and investors may think. The reality is that only a handful of companies have achieved this and with current market trends, it may take a decade to grow back into their previous valuations if they've lost 80% of their value.
ChapterThe importance of preferred shares
EpisodeE80: Recession deep dive: VC psychology, macro risks, Tiger Global, predictions and more
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
Founders can get incredible tax advantages through structuring founder shares at zero value and making an 83(b) election.
58:17 - 1:00:48 (02:30)
Summary
Founders can get incredible tax advantages through structuring founder shares at zero value and making an 83(b) election. This allows them to start the clock for long-term capital gains and gives them stock to distribute to employees through non-qualified or incentivized stock options.
ChapterThe importance of preferred shares
EpisodeE80: Recession deep dive: VC psychology, macro risks, Tiger Global, predictions and more
PodcastAll-In with Chamath, Jason, Sacks & Friedberg
In this podcast clip, the speaker explains the concept of preferred shares in investing through an example of how they protect investors from losing money in case the company decides to shut down or liquidate.
1:00:48 - 1:02:15 (01:26)
Summary
In this podcast clip, the speaker explains the concept of preferred shares in investing through an example of how they protect investors from losing money in case the company decides to shut down or liquidate.