Lesson: Take the Equity
Unless you have been under a rock recently, you have heard of the Facebook IPO announcement.
$100 billion valuation, over 1000 millionaires, and on and on.
With all the hype and publicity, I wanted to highlight an interesting story (click here for more details).
Call him lucky, smart or otherwise but one word associated with David Choe is multi-millionaire. In the early Facebook days, David painted the inside of the company’s headquarters. Instead of taking cash payment, he was offered stock, which he took. Now that stock is worth $200 million!
Yes it is a risk, but it had a big payoff for David. But he is not the only relevant story…
Many of us know William Shatner as the face of Priceline (as well as Captain Kirk)… What many do not know is that when the company first hired him as a spokesperson they offered him stock instead of paying him cash. Shatner took thes stock (instead of passing up the opportunity). While Shatner decided to sell half of his shares alloted right after the dot-com bust according to some sources (missing out on part of an 865% rebound of the company), he still really benefited from the other half he held on to… His Priceline holdings are unknown but it is clear that it has netted him millions.
The moral of the story?… Whether a painter, spokeperson, photographer or janitor, if you do work for a start-up (especially a hot start-up) the risk of taking payment in stock may be worth the cash you pass up on the front end. Choose the start-up wisely though, since most start-ups fail.
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