Ask HN: How to Manage Startup Windfall?

[throwaway9675]

I’m expecting a windfall from an upcoming tech IPO. I run a tech startup and have been angel investing in other startups since many years. I’m a business angel in the mentioned IPO and have no lock-up period. I had liquidity events in the past but not at this size. I dont’t plan to sell at IPO nor need the cash. I believe that the company will 10-20x over the next 10-20 years and would love to hold the shares. That said, I think this is not optimal for my portfolio. Possibly even idiotic. I’m wondering what the optimal play in terms portfolio construction is.

Reading and analysing the data [0] on IPOs over that last decades suggests that I should sell all shares on a schedule, like over 18 months [1], and reinvest in new startup deals.

Who has been in a similar situation and can point me in the right direction?

I do not want to retire. I want to keep investing in startups.

[0]: https://site.warrington.ufl.edu/ritter/ipo-data/ [1]: https://blog.wealthfront.com/sell-employee-stock/

[zibbity-rw]

I’ve seen a few threads like this here on HN. I feel like the most important thing is talk to a professional advisor. Take money off the tank but it’s not a “keep it all in the company” vs “sell”. You might want to do a rebalancing and keep 50/50 or something.

How much of your ownership stake would you need to sell to never worry about working again?

[throwaway9675]

I could 15-20% and not worry about working. My intention is to understand the optimal strategy. Keep the winner or sell shares and schedule and invest in ~50-60 new companies with larger tickets. I love my work and want to keep working.

[petercooper]

If I could lock up a guaranteed "this will see me out the rest of my life" amount safely by selling 20% of a holding, I would do that then do whatever I wanted/have fun with the rest. If that fun involved angel investing in a handful of other companies, so be it. Take care of yourself, then do what feels good, I say!