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Strange Day- Gets me Thinking
Old 05-31-2008, 05:19 AM   #1
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Strange Day- Gets me Thinking

Strange day this week at w*rk. Came in after taking an extra long weekend to learn my co-worker got severely burned on arm/hand in lab reaction accident (we are synthesis chemists) and was in the hospital. It's one of those things that everyone thinks: it could have been me. And for me, it makes me think - is it time to retire?

Here's my situation that makes me hesitate:

I invested in a start-up company 14 years ago. It has grown from 4 employees to >250 today. Currently, I own <5% of this closely held company which I learned later the day of the co-workers accident was close to being sold at the end of last year, my part would have been ~$3 million before taxes (coincidence?). Current company value (stock price set by company for selling within current investors) would get me about $1.5 million before taxes if it could be sold now. I probably could not sell more than 15% anytime soon. Founder, CEO and largest shareholder has told me his plan is to sell company by 2011, either to outside company or to employees. Company is growing (sells up over last few years 10-20%/year), just doubled it's manufacturing ability and has other plans to continue positive growth increases.

In addition to above, we currently have $300K in taxable accounts and $450K in retirement accounts. Firecalc shows >95% success using after-tax current company value coming in 2011. We could easily live in present location with current expenses plus health costs (est $20K/year) plus taxes until 2012 without tapping into retirement, if something delayed company being sold. But this leaves me short of my dream to move closer to the coast and getting a sailboat, which I could easily do if my part of company value was closer to $3 million and I had it now.

After writing this, seems obvious, but I'm still really hesitant - fear of the unknown and desire of fulfilling a dream. Any thoughts?

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Old 05-31-2008, 05:37 AM   #2
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I know what I'd do, but that shouldn't influence your decision...
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Old 05-31-2008, 10:12 AM   #3
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Having bailed bailed out with far less, to me the choice is to go for ER.
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Old 05-31-2008, 10:48 AM   #4
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I'd wait a few more days or weeks and take the emotion of the recent accident out of the equation. Sounds like that was pretty traumatic, and I wouldn't make a decision I didn't have to right after that.

So am I understanding correctly that you could keep your ownership in the company and hold out for the ~3M before taxes even if you left now? If you can't, I'd wait it out. Otherwise, you sound like a go.
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Old 05-31-2008, 11:43 AM   #5
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I've had the pleasure of meeting several people (Silicon Valley) who are in similar positions, and have heard about many more though j*b and personal contacts (the "one-degree of separation" thing). They seem to really enjoy w*rking in a series of lucrative ventures. I couldn't tell you which way to go, but congrats on having the option.

I would ask myself, "when was the last time I went sailing?" It's a lovely dilemma.
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Old 05-31-2008, 12:31 PM   #6
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Ahhh, the good ol' fashioned Golden Handcuffs dilemma!

Would you be able to keep your equity if you left? That is what would make or break the decision for me.
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Old 05-31-2008, 12:53 PM   #7
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F-One, with so much of your wealth tied up in one stock that you have very limited ability to sell, I would be selling as much as I could.

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Old 05-31-2008, 12:59 PM   #8
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Sorry for the misunderstanding, I don't work for the start-up company. It is an outside investment not related to my current j*b. So yes I still have the equity in the company no matter what I do concerning work. The issue with this investment is it is not easily sold, I won't be able to get majority of money out until it is sold or goes completely public, as it is a closely held corporation.
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Old 06-03-2008, 05:50 AM   #9
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One thing you may be able to do while you decide is play venture capatilist and do everything you can to make sure the start up sells for top dollar.
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