[nachox999]

Sure, what I'm getting at is that in your hands, or in the buyer's, the value can go to zero or multiply. If they buy, it's because they assess that the chances of it multiplying are greater than it going to zero. Why sell in that case?

[realslimjd]

The buyer is not assessing that way. The buyer has a diverse portfolio where they only need 10-20% of their bets to succeed. The math is not in your favor as an employee.

[jaggederest]

Your intuition is wrong here. Check out the Kelly criterion and do a little math - by my math, when you have modest personal assets <$1m, if you expect a 200x return from today, and you think there's a 1% chance that'll happen, you should sell 99% of your current stock and only hold the 1%. This maximizes the preservation of your net wealth.

VCs have MUCH larger bankrolls and so their Kelly bet is proportionately larger, but not percentage larger.

[dkural]

You're selling only 10%, you still get to see the other 90% go up in value, but that 10% you sold protects you from a wipe-out.