When is the right time for a founder to sell secondary?
Check out our eleventh video in the series of 1-minute tips for startup founders from Alexander Konoplyasty, co-founder of Flashpoint Venture Capital.
❓”When is the right time for a founder to sell secondary?”
👉Normally we see such sales post-series B stage
There is nothing wrong with founders who haven’t been getting high salaries or bonuses to partially sell their stake in the company. Normally we see such sales post-series B stage. Usually, you would want to sell as a part of a round not to raise questions but also easier to price. Being asked for some discount vs. preferred shares is quite normal, but you could try getting away without one. Selling when the company is still relatively small is never a good sign to investors. If the company is underperforming or changing something in the business model, a secondary sale by the founders would also be badly perceived. Selling strangely, i.e. not letting others tag or doing other funky things might haunt you in the future. Being non-transparent about your motives to sell might also harm you.