Unpopular opinion: TC shouldn't include paper money

Amazon
vIbM34

Go to company page Amazon

vIbM34
Oct 26, 2021 16 Comments

I saw that many people on blind include paper stocks in their TC. Some people even include increased valuation of their paper money based on their last funding round. Should people still include paper money in TC? I feel like it leads to incorrect comparisons between roles/companies.

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TOP 16 Comments
  • Of course it should include. How are you gonna compare a unicorn with FAang otherwise?
    Oct 26, 2021 8
    • Jk I misread that graph.
      According to this, 80% fail, 20% IPO / get acquired. It’s actually much more grim according to the below chart. Not as bad as “99%” but late stage doesn’t guarantee an exit
      Oct 26, 2021
    • Daimler
      theofficer

      Go to company page Daimler

      theofficer
      While I agree with the point of the graph, I think it's skewed to include "self-branded startups" that are just medium scale business instead of VC-scale businesses. Maybe they're crowdfunded business, who knows? We need a citation.

      I think it's possible to use current operating models to predict whether it'll succeed - and you'll need maybe a series A/couple years of history to truly be able to tell. While I think most VCs are mediocre at this, (skewing statistics again) I think it's possible to be 80% accurate in your predictions.

      I'm trying to build a portfolio myself, let's see if I can learn that skill
      Oct 26, 2021
  • Paper stocks have a valuation because professional investors purchase equity in a company. If those professional investors carry those investments on their books (assuming they mark them to market even in an up round), why shouldn’t employees count that as income (as long as they regularly update their numbers).
    Oct 26, 2021 0
  • Snap
    kfu

    Go to company page Snap

    kfu
    Last guy advocating this approach on blind was from Albertsons, so
    Oct 26, 2021 0
  • Argo AI
    fhfhjg

    Go to company page Argo AI

    fhfhjg
    VCs are very profitable, this tells all. Most startups fail, but we don't just join a random startup. Successful late stage startups rarely fail.
    Oct 26, 2021 1
    • Daimler
      theofficer

      Go to company page Daimler

      theofficer
      Depends on your definition of failure. An IPO can still be a failure, the company can still die post-IPO, you can still have no money post sale into an exit
      Oct 26, 2021
  • Well,
    Keep a margin of how much that paper money can go down( or up) and calculate TC accordingly.
    Like for MSFT/AAPL 85% of total value in your Tc

    For TSLA 200% of total value

    For FB 40% of total value … etc
    Oct 26, 2021 0