It’s strange you believe any financial transaction including selling shares of a company is inherently a ripoff. A really weird way to view the economy, since price is something that has to be agreed to by all parties. Why would some investor have to buy my company? If they are doing that it’s because they view it as a good deal.
Also don't use the word strange. I see it all the time on HN. "OH it's so strange that you would think... I find it so strange that you seem to be ... " yada yada yada.
It's basically a technique to get around the HN rules to insult a person while being polite. It's a complete dick move only used by dicks. Hopefully you made an honest mistake and you're not a dick.
When you own a share, if that share increases in intrinsic value with you doing zero additional work to increase that share. Then you just ripped someone off. Someone was doing work to increase that value, but they're not the one benefiting. The person benefiting is the person who invested nothing into increasing the value of the share.
Let me illustrate. You buy a 5$ share. You now own something worth 5$. Suddenly the share price increases to 10$. You earned an extra 5$ by sitting on your ass. Who increased the price of that share? Whoever it is, he got fucked. By you.
Increasing intrinsic utility is unique only to things related to human capital. This is entirely separate from value increases due to supply and demand.
Please. As if you have not already broken multiple HN rules such as “don’t be snarky,” “have curious conversation,” and “assume good faith.” Hiding behind the rules is a poor shield at this point. The fact you think “strange” is inappropriate language yet “fucked” is perfectly acceptable is… interesting.
Buying a share is not ripping someone off. They are selling the share because they want money up-front, and you are providing it to them. If they didn’t think selling the share was worth it at that price and time, they would hold on to it.
Buying the guy’s share at $5 is a price he set. He determined that getting $5 at this time is worth losing X% of control of the company that that share represents. No one is getting fucked, or at the very least, it’s unknowable who is getting fucked. Whether it was a fucking depends on whether the share goes up or down in value over time.
Fucked is at the border, but there's no insulting going on here that is not my intention. The word is just used to illustrate a concept a little more violently. Strange is an insult, it was personally directed at me. While, technically it's not an insult... the intent is there and is detectable. I suggest you don't use it the next time you want a discussion to continue.
>Buying a share is not ripping someone off.
I never said buying a share is ripping someone off. I'm saying watching a share grow in value is ripping someone off.
Also I'm not talking about bidding. I'm talking about the intrinsic value of the share. There is value outside of bidding. The bidding correlates with the intrinsic value but is not a completely accurate reflection of it.
It's hard to describe what intrinsic value is. But the concept exists outside of this conversation. Look it up if you never heard of it.
So to bring it full circle. The worker contributes work that increases the value of the company which in turn increases intrinsic value of the share. The owner of the share benefits from this increase in value while contributing zero work on his end.
If you are rich enough, you don't even have to work anymore. Simply growing your money endlessly is enough. Nothing in the universe comes for free and such people don't have to work because that work is being done by others in their stead.
Over a long term horizon or even in the short term through dividends... massive intrinsic value can be extracted from these assets.
Again though, the person buying the share and the person selling the share, and even a third party (who offers loans) all come to an agreement that the best option at the moment is to sell the share. Loans are available to the would-be seller, if the sale of the share would actually screw them. Loans and fundraising rounds are therefore in competition -- and it's not like a company hasn't been built on loans before (Cisco was built off of credit card debt in the beginning). The seller makes a judgment about near-term vs long-term pros and cons, deciding where to allocate most of the value.
Let's just stop here. It's pointless.