Hedging private tech valuations for entrepreneurs

https://www.pollyport.com/ask-polly-how-can-a-tech-entrepreneur-hedge-his-exposure-to-venture-valuations/

by jycool • 11 years ago

13 3 11 years ago

paveld• 11 years ago

If you are in tech, hedging your financial exposure to tech valuations is a bit like betting against your baseball team: it may feel disloyal, yet it is the rational thing to do.

Probably the most easily accessible strategy is to buy Short ETFs focusing on the tech sector, such as PSQ and SQQQ. As mentioned in the article, such strategies would be a blunt instrument. And holding these for more than a few months is often a bad idea, given the high fees.

hybryd131• 11 years ago

If you don't want to "bet against your own team" you could always buy sector ETFs and leave out technology which makes up 20% of the S&P. That way you diversify instead of doubling down on your tech investments.

sandyghai• 11 years ago

Hmm interesting. Wondering if the harder part is just not holding long positions-- I generally find that I'm most excited about other tech companies-- or more able to asses their value (especially for something like AWS, although like the article mentioned, is not really the source of Amazon's total value).

Hedging private tech valuations for entrepreneurs

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