2 months ago I had the opportunity to purchase shares in our startup for $1 with the share price being over $3 (that has a very real 10 x potential over next 3 years). Good deal right? Maybe, maybe not.
I turned down the offer to use bonus for Bitcoin instead. Here is why.
Investing or owning shares in a private company comes with many golden handcuffs.
1) You need to liquidate for an emergency or invest in another asset? Good luck! Shareholder agreements make this hard and slow. You'll also get a terrible price.
2) Liquidation preferences: Not all money is equal. You may have bought in at $1, and the share price is now $3 - or higher - but if a later stage investor comes in with liqudation preferences that means in any sale, the first $3 goes to them, and you get a return on every $1 after that. So your belief in a "3 x" return, is actually worth ZERO.
3) The $30 "exit" could happen in 10 years. The exit might also never happen.
On paper, some of my startup investments have very good returns, but I can't liquidate, so to me right now they're worth zero.
What's better? Your Bitcoin investment that has halved, or your startup investment that has 5 X? Depends, if you need emergency capital, Bitcoin.
As a technology investor, Bitcoin is the absolute utopia. We are still in the VERY early days of the adoption curve (simple math of % of world population X % of global wealth), so there is extreme upside potential with absolute liquidity. I have never seen a scenario like it. None of us will again in our lifetime. Count yourselves lucky you worked out the secret <$1T market cap.
For the record, I don't see Bitcoin in the same light as my other tech investments. This is a vote to a better future. I will HODL. I will only liquidate Bitcoin in the event of an emergency situation.
HODL for life.
Madge xx
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