15/ If you'd like to hear more from me, I write about startups and investing, including putting together free toolkits for Founders and Angels - sign up here: alexfmac.substack.com/about?utm_sour…
• • •
Missing some Tweet in this thread? You can try to
force a refresh
Is Adam Neumann a bad Founder for selling shares in WeWork before it crashed?
I don't think so.
Founders selling shares (secondaries) is good for both employees and existing investors.
Here's how it works and why it's good for all stakeholders 💰⬇️
First: What are secondaries?
Primary issuance: company issues new shares to investors, investors pay money to company.
Secondaries: existing shareholders sell their shares to investors and receive money for their shares (money does not go to company).
How do secondaries occur?
Normally they occur as part of a new funding round.
New investors may be investing $40m into the business, of which $30m is primary, and $10m in secondaries buying from existing shareholders (including potentially the Founders).