In response to:

When Insiders Sell An IPO is it “Bad”?

Brhurdle Wrote: Aug 26, 2012 4:22 PM

"Venture capitalists and angel investors are not stock market whizzes." You must be joking. Why would you put your capital at risk if you do not anticipate an IPO which allows you to cash out? Very few start ups generate enough profits to justify the high risk and allow cash out since the invested capital is needed to maintain growth. The whole premise of this article is pure baloney.

Join the Debate!

All comments and users are subject to Townhall's new comments policy.

johninohio Wrote: Aug 26, 2012 11:44 PM

To cash out means to sell your shares on the market. That is, to someone else. This doesn't change the amount of money the business has to work with. It received the money from the IPO and that doesn't go away. What happens to the shares after that doesn't matter to the business.If IPO share holders are selling at a profit, that was the goal. If they sell at a loss, it's probably because they have since realized it was a mistake to buy in the first place.

Flag as Offensive

Post Comment

Jeff3820 Wrote: Aug 28, 2012 9:59 PM

99.9% of angel investments don't end up in an IPO.

Flag as Offensive

Post Comment

Read Full Story

When Insiders Sell An IPO is it “Bad”?

Fred Wilson has a great post on the “sturm and drang” of insiders selling. It’s a great post because the media is trying to connect the downtrend in company stock prices to the company being poorly run.

Certain investors are being called out for selling stock. Insiders are being publicly chastised for selling stock as lock ups expire. As Fred correctly points out, this is wrong.

First, when you invest early as Peter Thiel did in Facebook ($FB), or Eric Lekofsky and Brad Keywell did in Groupon (

Related Tags: IPO