Ownership Freedom Tradeoff

Shaan Puri shares his perspective on the trade-offs between owning a large piece of a smaller company versus a small piece of a larger company, emphasizing the importance of freedom and optionality in business decisions.

• Prefers owning more of a smaller company because:

  • More fulfilling personally
  • Better economic outcomes through more options
  • Greater control over exit strategies
  • Can walk away with more money in modest exits ($10M from a $12M sale)

• Challenges with small ownership in bigger companies:

  • If things go sideways, you might walk away with very little
  • First $100M often goes back to investors
  • Less flexibility in exit options
  • More stakeholder management required

• Day-to-day considerations:

  • Smaller companies are easier to manage without fundraising pressure
  • But face more financial stress and payroll concerns
  • Less cash cushion to fall back on

• Father's wisdom about scale:

  • Big and small projects often require same time commitment
  • Better to play in industries with higher minimum stakes
  • Example: One biotech deal ($5M) equals 5 years of restaurant work

• Personal optimization:

  • Values freedom above most things
  • Ideal scenario: Working for himself on big potential projects
  • Avoids big companies due to loss of time/energy freedom
  • Believes internet enables this balance of independence and scale