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Offtopic: Suggestion to the tip guys: Can you take me to the tipxxx page on the second click. People might want to know how the button works. Or was that a conscious choice?
The star now links to http://tipjoy.com

We're debating making things more explicit. Hopefully the copy text is enough for most people "Like this? Leave a tip: [tip this]"

We're going to make that customizable soon.

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Give Charles Simonyi at Intentional Software a call, he should be in a position to bid for the elance job;-)

http://www.intentsoft.com/

I actually know someone very well who knows him very well. Maybe I'll do that.
If you can sell 2% of the company for $1,000, doesn't that imply a $50,000 pre-money valuation?
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I'm referring to the last bit of his post. I assumed I didn't understand something about the arithmetic.
It implies 49k premoney. Person who put 1k in would then own 1/50th of the resulting shares.
$1,000 for 2% implies a $49k pre-money valuation. Either way, Matt's math is off.
$1000 = $50000 * 2%
I know. That'd give a post-money valuation of $51k, though, giving you a little less than 2% of the company in the end.
If I pay $1 for 20% of your stock, I'm saying your company is worth $5. I now have 20% worth $1. You have 80% worth $4.
Suppose my company is worth $5 right now. If you give my company $1, it is now worth $6. ($5 assets before + $1 cash). $1 / $6 = 1/6th of the company; you have 1/6th and I have 5/6ths. If you pay $1 for 20% of the stock, that implies a $4 pre-money valuation--after adding the $1, the company is worth $5, so your share is worth 20% and mine is 80%.
The downmods are misplaced. You're absolutely right mathwise here, you're just missing a heretofore unspoken detail.

The assumption is that in an angel or VC round you'll create new shares for the investor to own. If there were no new shares, pre-money valuation would always equal post-money valuation (you're just selling shares) and all of your explanation would be fine.

$50,000 doesn't sound as humorous in context as $48,000. I realized the numbers were a tad off.
this is funny, i read the other post and clicked through to see the last name maroon naming convention and I immediately thought of matt maroon, then he commented on it.

hope you take over the world. should have included cloning myspace.

  <!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01//EN" "http://www.w3.org/TR/html4/strict.dtd">
  <html lang="en">
      <head>
          <title>Maroon Demo</title>
  		<script src="jquery-1.2.3.pack.js" type="text/javascript"></script>
  		<script type="text/javascript">
  		$(document).ready(function(){$("#ebay").text("Shop Victoriously!");});
  		</script>
      </head>
      <body>
  		<div id="ebay"></div>
      </body>
  </html>
Let me know what your paypal address is so I can request money :)
themaroon hotmail.com. Send me $100 so that I know it's you and can reply.
I already have a language like that, but instead of just text it takes in text and money and turns it into code. It's also pretty slow for a language, taking up to several months depending on the complexity of the problem.
Here's my algorithm:

1. Parse the program input with a lexical analyzer that:

   i. Loops through each character.

   ii. Appends it to a buffer.
2. Submit the lexed program to eLance with a 7-week bid.

   i. If someone with at least one project completed bids on it, continue.

  ii. If no one responds by the 7th day, return an error: "Syntax error in program. Please recode."
3. Accept the bid.

4. while(!checkIfIndianSentCompletedProjectFiles() && isTakingLessThanTwoMonths()) Sleep(1);

5. if (!isTakingLessThanTwoMonths()) return a run-time error: "Temporal stack overflow."

6. else print resultant code.

It takes a long time to compile some projects, but it's reasonable, since it is after all a very, very high level programming language.

Nice. I notice that unlike most algorithms I've read, this one requires a credit card number as an input. :)
//My first Maroon program Make me a "Hello, World!" program, written in Maroon.
My first Maroon program:

"Make me a compiler for Maroon."

My second Maroon program:

"Make me a time machine to send the first Maroon program back to February 2008."

See? Nothing to it.

This article is fluff. Insider fluff as Matt Maroon got funded by YC, but fluff nonetheless.