bkp_duke
Well-Known Member
I got to take the decision to sell 100 shares of TSLA this week.
Long story short, a guy I trained with met a lawyer who quit his job to fund his business he created with his brother 5 years ago. They accepted a Dragons Den offer of 300k for 30% ownership 5 years ago when their annual revenues was 500k. The valuation was 5M in October 2021 and is now 10M since they signed a 6M contract to sell in the US and are starting their US expansion selling at Costco, Disney, Dollar General. One of the funder has to sell 1% of his 12% stake in the company to invest with his friend in a telemedecine business worth 25M before it fills for IPO next year for a potentiel 1B value. Their gross revenue is increasing 10% monthly and the current consortium holding 75% of the company I am offered to buy 1% plan to sell the company in 4-5 years for 50M valuation realizing a 5x on my initial investment.
He wants to keep at least 10% of his shares in the company so he is offering me to buy 1% of his shares because he needs liquidity in the next week to close the deal with the other company which he accepted to buy 5% 30 days ago.
Would you sell 100 TSLA shares to buy 1% of a privately held profitable company with 120% YoY growth for a potential 4-5X within 4-5 years?
Been in this position, and it all comes down to probability of success of the startup. The one I invested in (pre-series A funding) still has not gone public after 6 years. I wish I had put the money in TSLA instead.
Not advice is do your own homework on the company and be skeptical of claims. Assume anything and everything can go wrong. Assume they are not as competitive in the space as claimed. Etc. Etc. Etc. With that backdrop, then what do you think the return will be?
Not advice, do your own homework.