Show HN: Startup Equity Adventure Game (opens in new tab)

(options-game-polymathrobotics.pythonanywhere.com)

36 pointsiliabara14d ago26 comments

I put this together (with Claude) as a semi-gamified way for folks to learn about startup equity. Take a look, and share your scorecard :)

26 comments

mikert8914d ago

Quick equation:

1. is it an ai lab with a well know founder -> equity might be worth something

2. are you the CEO founder? -> equity might be worth something

3. are you a non CEO co founder? -> equity might be worth something, will probably be stolen from you

4. is the company a year or two from a certain IPO? equity might be worth something

5. all other cases likely zero

apparent14d ago

Seems like 3 is a bit pessimistic. After all, if there are 3 founders then that greatly decreases the chance that the CEO steals equity from the other 2 cofounders. The CEO generally wouldn't have > 50%, so the non-CEO co-founders could keep the CEO in check.

jagged-chisel13d ago

Seems accurate according to my experience. It’s the new investment banks in later rounds that cause it. Bigger investments, stronger guarantees, better preferences, and lack of understanding on the part of inexperienced founders, plus lack of power held by the employees options pool … recipe for “only the banks see any upside.”

mikert8913d ago

alot of financial engineering happens if the company is raising large rounds, if you leave early as a cofounder, they will absolutely mess with your equity. And even if you are there, youre considered an expense, unless the CEO explicitly advocates for you

mikert8913d ago

its so common that I am shocked people willing enter roles like co-founding CTO without serious legal protections in place. go spend time in NYC/SF and talk to actual cofounders

dnnddidiej13d ago

Is there even a CEO per-se in this situatuon?

deaux13d ago

Depends on country and type of business entity. Some of them require one legal representative.

SilentEditor13d ago

This is a clever way to make a dry, high-stakes topic actually approachable, and the game framing makes equity tradeoffs much easier to internalize.

How did you decide where to simplify versus stay financially accurate, and were there any startup-equity edge cases you intentionally left out because they made the game less intuitive? :)

iliabaraOP13d ago

Hey thanks!

There are a ton of edge cases, but the goal was to serve as an intro, and to get a grasp of the basics.

Links in the intro to a more serious look at things.

tailscaler202614d ago

It doesn't understand authorized vs issued shares

iliabaraOP13d ago

In practice, for YC or similar Bay area US startups, they are the same.

All authorized shares are issued, and then the charter is amended through board action and more shares are authorized and issued at each stage.

jmward0114d ago

SaaSyCryptoAI - Leverage our custom AI driven backend to mint your own coin! Seriously though, great little lesson. It would be nice to factor in internal raises and a bit of granularity for when exercises happened to see final payouts and similar bonus topics but I would recommend this to anyone thinking about taking a job with options involved.

nerdsniper14d ago

Add the effects of "preferred overhang" on employee payouts for various different exit outcomes like acquisitions. Usually only founders and investors with "preferred shares" see anything and those with common stock (employees) see theirs get completely eaten by the overhang.

iliabaraOP13d ago

Depends on the outcome.

If it's a positive outcome, then preference has no role.

This game models good outcomes, with warnings for things like down rounds

fermatf13d ago

Useful! I like playing such games where u simulate something from real world so you get playground to do mistakes.

iliabaraOP13d ago

Thanks! :)

opengrass14d ago

Thank you for python anywhere, I will add that to my chasm of free hosters.

iliabaraOP13d ago

Ya for sure, and even paid account is very cheap, few dollars a month

jiveturkey14d ago

so many erroneous statements in this game. also it's not much of a "game", is it.

iliabaraOP13d ago

Ya, I'd appreciate pointers if there are errors :)

self_awareness14d ago

Care to explain where are the errors?

jagged-chisel14d ago

Yeah, that’s not how my company operates. I’m maintaining my majority share by splitting only. The VCs can go along, or they can hope their next investment is the unicorn.

withinboredom14d ago

Yeah, also seems very US-centric with "outstanding shares". Other countries don't allow you to have outstanding shares. Also, where is the "reinvest" option during series rounds. Like, what founder also doesn't reinvest to keep their equity during fund raising?

iliabaraOP13d ago

This is US centric, it's mentioned on the first page, along with the notes and links.

Reinvesting is a minority, edge case. I can't think of a single VC company in the Bay area that can have founders reinvest shares and not cause issues raising.

j / k navigate · click thread line to collapse

26 comments

mikert8914d ago

Quick equation:

1. is it an ai lab with a well know founder -> equity might be worth something

2. are you the CEO founder? -> equity might be worth something

3. are you a non CEO co founder? -> equity might be worth something, will probably be stolen from you

4. is the company a year or two from a certain IPO? equity might be worth something

5. all other cases likely zero

apparent14d ago

jagged-chisel13d ago

mikert8913d ago

its so common that I am shocked people willing enter roles like co-founding CTO without serious legal protections in place. go spend time in NYC/SF and talk to actual cofounders

dnnddidiej13d ago

Is there even a CEO per-se in this situatuon?

deaux13d ago

Depends on country and type of business entity. Some of them require one legal representative.

SilentEditor13d ago

This is a clever way to make a dry, high-stakes topic actually approachable, and the game framing makes equity tradeoffs much easier to internalize.

How did you decide where to simplify versus stay financially accurate, and were there any startup-equity edge cases you intentionally left out because they made the game less intuitive? :)

iliabaraOP13d ago

Hey thanks!

There are a ton of edge cases, but the goal was to serve as an intro, and to get a grasp of the basics.

Links in the intro to a more serious look at things.

tailscaler202614d ago

It doesn't understand authorized vs issued shares

iliabaraOP13d ago

In practice, for YC or similar Bay area US startups, they are the same.

All authorized shares are issued, and then the charter is amended through board action and more shares are authorized and issued at each stage.

jmward0114d ago

nerdsniper14d ago

iliabaraOP13d ago

Depends on the outcome.

If it's a positive outcome, then preference has no role.

This game models good outcomes, with warnings for things like down rounds

fermatf13d ago

Useful! I like playing such games where u simulate something from real world so you get playground to do mistakes.

iliabaraOP13d ago

Thanks! :)

opengrass14d ago

Thank you for python anywhere, I will add that to my chasm of free hosters.

iliabaraOP13d ago

Ya for sure, and even paid account is very cheap, few dollars a month

jiveturkey14d ago

so many erroneous statements in this game. also it's not much of a "game", is it.

iliabaraOP13d ago

Ya, I'd appreciate pointers if there are errors :)

self_awareness14d ago

Care to explain where are the errors?

jagged-chisel14d ago

Yeah, that’s not how my company operates. I’m maintaining my majority share by splitting only. The VCs can go along, or they can hope their next investment is the unicorn.

withinboredom14d ago

iliabaraOP13d ago

This is US centric, it's mentioned on the first page, along with the notes and links.

Reinvesting is a minority, edge case. I can't think of a single VC company in the Bay area that can have founders reinvest shares and not cause issues raising.

j / k navigate · click thread line to collapse