Ask HN: What's wrong with a founder cashing in on a financing round?
My personal view has always been that if one allows the founders to cash in on some of their equity on a financing round, wouldn't that provide some financial security to the founders and allow them to "aim for the moon"? If I had a startup which is at that nexus point where it has a potential to be something bigger AND i'm generally broke, I will be less inclined to take any risk that may end with me being bankrupt. Having said that, if I was allowed to take some money off the table where I'm enough to be financially secure, I would be more susceptible to go all way with my startup.
I keep saying "some" because there is a difference between cashing in on a small or big part of the founder's equity and I can understand the media frenzy that arises from a founder cashing in a big part of their equity (i.e. Groupon) but I don't get why the same stigma exist against founders who do the same for a small part of their equity.
This is a genuine question and would like to know what is the general view out there for any HNers, VCs or founders alike.
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