Ask HN: Is it possible to sell a startup, but also keep a small stake in it?
This is possibly a very stupid question, but I'm curious.
Imagine I own a start-up called Foo. Facebook offers to buy Foo for $n. This sounds great, except I think there's a good chance that Facebook will grow Foo to be worth 100 x $n in a few year's time, and I want some exposure to that potentially large upside.
What are my options besides buying some Facebook stock with my $n, or asking for something like 2 x $n?
Is it possible to sell, say, 95% for .95 x $n, but maintain a 5% "stake" in the possible 100 x $n business? I'm not sure how that would work, but surely start-up founders have faced this conundrum before -- how is it resolved?
Imagine I own a start-up called Foo. Facebook offers to buy Foo for $n. This sounds great, except I think there's a good chance that Facebook will grow Foo to be worth 100 x $n in a few year's time, and I want some exposure to that potentially large upside.
What are my options besides buying some Facebook stock with my $n, or asking for something like 2 x $n?
Is it possible to sell, say, 95% for .95 x $n, but maintain a 5% "stake" in the possible 100 x $n business? I'm not sure how that would work, but surely start-up founders have faced this conundrum before -- how is it resolved?