Recent comments in /f/explainlikeimfive

breckenridgeback t1_j5zbkuo wrote

It's actually pretty rare for a startup to be turning enough of a profit (or indeed, any at all, although that's changing recently) for investors to make money directly off of dividends. Their money usually comes by selling their share of the company during an acquisition or IPO.

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TheRunningMD t1_j5zag1h wrote

I buy 20% if a company for 1 million dollars. Now the evaluation of the company is 5 million.

The company goes public. It is now selling great in the market and the total evaluation is now 50 million.

If said investor sells all of his stock (20%) to people that want to buy it he now has 10 million. So he made 9 million total.

This is obviously not taking into account things like how him selling all his stock effect price, but we need to make it simple.

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phiwong t1_j5z993f wrote

In an IPO, the shares that the angel investor owns is now traded publicly. Each share is now worth the open market share price and can be sold for cash.

If the startup is acquired, the amount the purchaser pays is distributed to the existing shareholders (angels, founders etc) according to the portion of shares they own.

Shares represent ownership. The buyer has to pay the owner to purchase. That is the straightforward concept.

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its-a-throw-away_ t1_j5z93kz wrote

Think of a business as an engine that is designed to generate money.

The business plan is the engine's blueprint.

But for the engine to actually run, you have to machine its parts, assemble them, test the engine, and make a few adjustments before it will reliably generate revenue. These require startup capital.

Engines also need fuel (cash). But the idea is that so long as it generates more cash than it consumes, then the engine does its job.

Angel capital is what lets a startup begin building the pieces needed for its money engine to run. Once the engine starts running, cash is diverted back to investors in proportion to what was agreed upon in exchange for their equity.

Even if the business is sold or acquired, the initial investors still retain their share of the business's output.

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breckenridgeback t1_j5z8pux wrote

An acquisition usually means buying the existing shares. Since initial investors got their shares at very low valuation (roughly, "the stock price was low", though the company isn't publicly traded at that stage), a high-value acquisition usually buys shares for much more than the investor paid for them. That means the investor gains money.

The same goes for an IPO. In that case, the stock becomes publicly traded, usually at an initial price far above the valuation per share at the time the investor invested, and the investor can sell their stock for much more than they bought it for.

In broader terms: the investor owns part of the company as part of their investment. If the company becomes worth more, their share also becomes worth more.

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Any-Broccoli-3911 t1_j5z1gna wrote

All species have their own nutritional needs.

The genetically closer 2 species are, the more similar will be their nutritional needs, but it's still not the same.

Mammals are a large group with very distinct diets, so their nutritional needs are very distinct.

Our nutritional needs are more similar to chimp and primates in general.

All animals need energy (as carbs including fibers for the ones with bacteria that can ferment them, fat and/or proteins) and minerals (including nitrogen for the ones who have bacteria that uses nitrogen to make proteins). The ones that don't have bacteria that produces proteins, must also eat proteins, but they don't need nitrogen outside of the proteins.

Vitamin need aren't shared by all animals.

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TorakMcLaren t1_j5yy4hm wrote

Imagine you do an experiment. You find somebody from every age from 1 to 100 and you measure their height. Then, you plot these on a graph. Experience tells you that for the first 20 years or so (probably less, but let's roll with it) you get taller and taller. This happens quickly at first, but slows down as you approach 20. Then, your height stays flat for the next 50 years or so, until 70. Then, beyond that, you begin to lose a bit of height. The "line of best fit" of the data you've collected should fit that pattern. It should be a smooth curve that peaks around 20 and plateaus for a while, before gradually dropping at the end.

Say instead you tread your data like a dot-to-dot. You connect 1 to 2 to 3 to 4... with straight lines and sharp corners. This would be overfitting the line. Instead of seeing the whole smooth progression, your line might make you think or heights go up and down constantly. Maybe you happened to pick a tall, early-developing 12 year old and then a short, late-developing 13 year old. The line you've drawn makes it look like we peak at 12, then immediately shrink, before slowly growing again. Perhaps the 50s were all shorter women and the 60s taller men, or maybe they even alternated!

Point is, you're giving too much weight to each individual datapoint rather than to the general trend.

This is similar to overfitting in machine learning. Every part of your training dataset has certain flukes and random features. If you train on too small a set for too much, you end up with a system that is very good at dealing with the training images but not so good at stuff beyond that.

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