I made an angel investment that worked out great, despite putting in really no thought or effort. Since I was never particularly diligent about this investment in the first place, i need some advice!
I was investor #1 for a small startup about 3 years ago, with a SAFE at valuation cap of $1M and an 80% discount rate. The company is now being acquired, so the liquidity event is at hand.
I invested partially because I wanted to make money and was confident in the founder, but I also had non-monetary incentive. As a startup founder myself, I wanted to sit on the other side of the table, ignorant as i was/am, so I my experience as an investor would be helpful when i started seeking investors myself. As it turns out, I had a good experience and made some money.
I need help determining how to evaluate my decision to take my money and run, or roll over into the acquiring company. I know no one can tell me which choice is better except myself, so i am looking for help in how to evaluate this decision.
TBH, i am pretty uninformed about all this stuff. I know i can read about it, and it is my personal responsibility to do so, but it still gets me confused. For example, this quora post is helpful.
I am tempted to roll over my assets into the new company, because they are about to raise a series B. As i understand, if i take my cash now, I get a 3.5x gross return (guaranteed). But given the discount rate, and the huge funding round the acquiring company seeks to execute, I might be able to see a 20x - 40x return (i think), given risk.
I am meeting with the acquiring company's CFO next week, and want to prepare for it, so it's not a huge waste of time for both of us.
Please ask me to provide more information if it is needed.