Founders who sold too early, and the math they missed
Leuven
Joined August 2022
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Alexey Pajitnov invented Tetris in 1984 at a Soviet state computer lab. For twelve years he didn't get a cent from it, while it sold tens of millions of copies on the Game Boy alone. What finally paid him was a number nobody in the room took seriously: ten.
In the video below Henk Rogers, who was in that room, explains it. Listen to what he says about spreadsheets.
The Soviet state owned whatever its employees made. In 1989 its export agency, Elorg, sold the rights to Nintendo. To make the paperwork hold up, the lawyers needed a chain of title going back to the author.
So Pajitnov's rights were signed over for a period of ten years. Nobody argued about it. Nobody thought a puzzle game would still matter in year eleven.
Worked out.
Every model in that room was built for ten years.
In 1995 the rights went back to him. After a year-long fight with Elorg, he and Rogers formed The Tetris Company in 1996, and his royalties began.
Tetris is still selling 40 years later. Everything after year ten was money nobody had priced.
Keep this part. The tail decides, the mean just talks. The clause everyone shrugs at is where the tail lives.
You're signing a licence for something you made. How many years do you write in, and why that number?
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Jack Whittaker won $314.9 million on Christmas Day 2002, then the biggest single lottery ticket in American history. He took the cash, about $113 million after taxes. Two years later his granddaughter was dead.
In the video below he talks about her. Listen to what he says the money took away from him.
Brandi was 17 when he won. He gave her about $2,000 a week, and four cars.
Worked out.
$2,000 a week is $104,000 a year, handed to a teenager.
The annuity option would have paid the $314.9 million over 30 years, roughly $10 million a year before tax. He chose all of it at once.
In 2003 he was robbed of $545,000 in cash at a club. That year Brandi's boyfriend died of an overdose in one of his houses. In December 2004 Brandi was found dead.
Keep this part. A fortune is an average across many possible lives. A family only gets to live one of them.
"I wish that we had torn the ticket up too," he says.
Knowing how it went: lump sum or annuity? And what would you have given a 17-year-old?
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Alexey Pajitnov invented Tetris in 1984 at a Soviet state computer lab. For twelve years he didn't get a cent from it, while it sold tens of millions of copies on the Game Boy alone. What finally paid him was a number nobody in the room took seriously: ten.
In the video below Henk Rogers, who was in that room, explains it. Listen to what he says about spreadsheets.
The Soviet state owned whatever its employees made. In 1989 its export agency, Elorg, sold the rights to Nintendo. To make the paperwork hold up, the lawyers needed a chain of title going back to the author.
So Pajitnov's rights were signed over for a period of ten years. Nobody argued about it. Nobody thought a puzzle game would still matter in year eleven.
Worked out.
Every model in that room was built for ten years.
In 1995 the rights went back to him. After a year-long fight with Elorg, he and Rogers formed The Tetris Company in 1996, and his royalties began.
Tetris is still selling 40 years later. Everything after year ten was money nobody had priced.
Keep this part. The tail decides, the mean just talks. The clause everyone shrugs at is where the tail lives.
You're signing a licence for something you made. How many years do you write in, and why that number?
Truntr retweeted
In 1990 the IRS sent Willie Nelson a bill for $16.7 million and seized his ranch, his studio and his gold records. His plan to pay it back was an album of just him and a guitar, called The IRS Tapes.
In the video below, 1991, he's asked how one man gets into that much trouble. Listen to what he says he had already paid.
The debt came from tax shelters his accountants at Price Waterhouse had put him into in the early '80s. The IRS disallowed them, and the penalties and interest kept growing. He sued the firm for $45 million.
Worked out.
The album sold by phone for $19.95. The plan needed millions of copies.
What the IRS actually collected from it: about $3.6 million.
$3.6 million of $16.7 million is 22%.
The other 78% came from a settlement with Price Waterhouse that was never made public, from years of touring, and from fans who bought his seized things at auction and gave them back. By 1993 he was clear.
Even the famous number has an error bar. You'll see $16.7 million, "$17 million and growing daily", and $32 million, depending on who's telling it.
If your accountant puts you in a shelter and the IRS throws it out, who should pay the penalties: you or the accountant?
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Nikola's 2018 video showed its truck cruising down a highway. Prosecutors later said it was rolling down a hill. Two years later the company was briefly worth more than Ford. Its founder, Trevor Milton, was convicted of fraud. Then he was pardoned.
In the video below, the day after the pardon, the Wall Street Journal asks him about the $600-plus million prosecutors wanted for investors. Listen to how many victims he thinks there were.
October 2022: a jury convicted him of securities fraud and wire fraud. December 2023: four years in prison. Prosecutors asked for $680 million in restitution to Nikola shareholders.
February 2025: Nikola filed for bankruptcy.
March 2025: President Trump pardoned him. No conviction, no restitution. The investors get nothing.
Five months before the pardon, Milton had given $920,000 to Trump's campaign committee.
Worked out.
Prosecutors: $680 million owed to shareholders.
Milton: "maybe there's 10 or 15 people" who misunderstood him "on a quick podcast."
$680 million across 15 people is $45 million each.
A jury said fraud. The pardon says it's all over.
If a conviction is erased, should the restitution be erased with it? Yes or no, and why?
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Ron Wayne owned 10% of Apple for 12 days. He sold it for $800. When Apple hit $1 trillion in 2018, CBS put that 10% at $100 billion.
In the video below he explains why he walked. Listen to what he says he owned that Jobs and Wozniak didn't.
April 1976. Wayne, 41, typed up the partnership contract himself: Jobs 45%, Wozniak 45%, Wayne 10% as the tiebreaker.
Then Jobs took an order from a local store with a reputation for not paying its bills, and borrowed $15,000 for parts. In a partnership, every partner is personally on the hook for the debts. Jobs and Wozniak had nothing to lose. Wayne had a house, a car and a bank account.
Worked out.
If the store paid: 10% of a company nobody had heard of.
If it didn't: creditors go after whoever has assets. That was him.
He took $800. Months later Apple sent $1,500 more to sign away any claim. Total: $2,300.
He didn't think Apple would fail. He thought it might, and if it did, he was the only one with something to lose. With his house on the line, $800 was a fair price for sleeping at night.
He says he never regretted it. Not once.
The $100 billion ignores dilution, so argue about the real number below. But first: you're 41, you own a house, and two guys aged 21 and 25 want you to sign for unlimited liability in exchange for 10%. Do you sign?
Ron Wayne owned 10% of Apple for 12 days. He sold it for $800. When Apple hit $1 trillion in 2018, CBS put that 10% at $100 billion.
In the video below he explains why he walked. Listen to what he says he owned that Jobs and Wozniak didn't.
April 1976. Wayne, 41, typed up the partnership contract himself: Jobs 45%, Wozniak 45%, Wayne 10% as the tiebreaker.
Then Jobs took an order from a local store with a reputation for not paying its bills, and borrowed $15,000 for parts. In a partnership, every partner is personally on the hook for the debts. Jobs and Wozniak had nothing to lose. Wayne had a house, a car and a bank account.
Worked out.
If the store paid: 10% of a company nobody had heard of.
If it didn't: creditors go after whoever has assets. That was him.
He took $800. Months later Apple sent $1,500 more to sign away any claim. Total: $2,300.
He didn't think Apple would fail. He thought it might, and if it did, he was the only one with something to lose. With his house on the line, $800 was a fair price for sleeping at night.
He says he never regretted it. Not once.
The $100 billion ignores dilution, so argue about the real number below. But first: you're 41, you own a house, and two guys aged 21 and 25 want you to sign for unlimited liability in exchange for 10%. Do you sign?
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Dick Fuld ran Lehman Brothers into the largest bankruptcy in US history. Congress worked out he had taken home about $480 million. Two months after the collapse, he signed his $13.7 million Florida mansion over to his wife for $100.
In the video below, October 2008, Henry Waxman reads him the number and asks one question. Listen to how Fuld answers it.
"About 30 percent of the firm was owned by employees," Dave Demuro, who spent 24 years at Lehman, told Marketplace. He said he lost a lot of money. Many of the 28,000 staff had their savings in the stock.
Worked out.
$480 million over eight years is about $60 million a year.
Lehman was worth about $60 billion at its 2007 peak. 30% of that is roughly $18 billion of employee wealth.
By September 2008 the stock was close to zero.
Fuld's defence: most of his pay came in stock, and he still held most of it when Lehman filed. True. He also kept the cash.
He was never charged with a crime. The mansion sold in 2021 for a reported $32.5 million.
Congress asked if it was fair. The deed says $100.
Should a CEO's pay be clawed back when the company goes bankrupt? If yes, how many years back?
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The New York Mets pay Bobby Bonilla $1.19 million every July 1st, and will until 2035. He last played for them in 1999. One big reason they agreed to it was Bernie Madoff.
In the video below Bonilla says what the check means to him, and Bloomberg, in 2011, explains what the Mets were thinking.
In 2000 the Mets owed him $5.9 million and wanted him gone. Instead of paying it, they offered a deal: wait ten years at 8% a year, compounding, then take it as 25 annual payments.
Worked out.
$5.9 million × 1.08^10 = $12.74 million by 2011.
Spread over 25 years at the same 8%: $1,193,000 a year. That's the famous check, almost to the dollar.
Total: about $29.8 million for a $5.9 million debt.
Why agree to 8%? Because the owner, Fred Wilpon, had money with Madoff, who was reporting 10% to 12% a year. Every year. Owe at 8%, earn 12%, keep the difference.
Even at 10%, that difference over ten years was worth about $2.6 million. On paper.
In December 2008 Madoff confessed. The 12% had never existed. The 8% was in a contract.
Keep this part. A return with no bad years isn't a great average. It's a warning sign.
You're the Mets' CFO in 2000. $5.9 million now, or $1.19 million a year from 2011 to 2035? Show your discount rate.
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Mike Tyson made $300 million. Or $400 million. Or $600 million. Pick a YouTube video. In the clip below an interviewer reads him the $400 million figure and asks if it's correct.
His answer: "I don't know. It could have been."
Here's what's actually on paper.
August 2003, Chapter 11. About $27 million in debts, per federal court records. More than $13 million of it owed to the IRS. One line on the list: a $173,706 gold chain he took on credit.
That week ESPN put his ring earnings at "nearly $300 million."
He was suing Don King for $100 million, saying King had cheated him out of millions. In 2004 they settled for $14 million.
Worked out.
The famous number runs from $300 million to $600 million. The error bar is as big as the smallest estimate.
The interviewer says "$50 million in debt." The court filing said about $27 million.
The numbers with paper behind them are the small ones: $27 million owed, $13 million to the IRS, $14 million from King.
Your guess: what did Tyson actually take home over his career, after King, trainers, taxes and the entourage? Give me one number.
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Colonel Sanders sold Kentucky Fried Chicken in 1964 for $2 million. Seven years later he opened the paper and saw the same company had been sold again, for $240 million. A TV reporter asked him if he felt left out.
His answer is in the video below, recorded that year. Listen to what he says nobody should write to him for.
He started franchising his recipe in his sixties. By 1964 there were more than 600 restaurants. He was 73. He took $2 million in cash and a $40,000 salary to stay the face of the brand.
Worked out.
$2 million to $240 million in seven years is 120 times.
That's the value roughly doubling every year, seven years in a row.
His salary over the same seven years: $280,000.
He kept the white suit and lost the say. He called the new gravy "wallpaper paste" in the press and was sued for libel over it. The suit failed.
When he and his wife opened a restaurant called "The Colonel's Lady Dinner House", the new owners sued over his image. He countersued for $122 million. It settled for $1 million.
The man on every bucket had sold the right to decide what went in it.
At 73, would you have taken the $2 million, or kept a share of the next seven doublings?
Colonel Sanders sold Kentucky Fried Chicken in 1964 for $2 million. Seven years later he opened the paper and saw the same company had been sold again, for $240 million. A TV reporter asked him if he felt left out.
His answer is in the video below, recorded that year. Listen to what he says nobody should write to him for.
He started franchising his recipe in his sixties. By 1964 there were more than 600 restaurants. He was 73. He took $2 million in cash and a $40,000 salary to stay the face of the brand.
Worked out.
$2 million to $240 million in seven years is 120 times.
That's the value roughly doubling every year, seven years in a row.
His salary over the same seven years: $280,000.
He kept the white suit and lost the say. He called the new gravy "wallpaper paste" in the press and was sued for libel over it. The suit failed.
When he and his wife opened a restaurant called "The Colonel's Lady Dinner House", the new owners sued over his image. He countersued for $122 million. It settled for $1 million.
The man on every bucket had sold the right to decide what went in it.
At 73, would you have taken the $2 million, or kept a share of the next seven doublings?
Truntr retweeted
TLC's CrazySexyCool is the best-selling album ever by an American girl group. More than 10 million copies in the US alone. In July 1995, while it was still selling, all three of them filed for bankruptcy.
In the video below: the 1996 Grammys press room, trophies in their hands, then Left Eye doing the math on VH1. Check her numbers as she goes.
They signed in 1991 through Pebbitone, the production company of their manager, Pebbles. Her husband co-ran their label, LaFace.
The deal paid the group 56 cents per album. Not each. All three.
Worked out, with her numbers.
10 million albums × 56 cents = $5.6 million.
Minus $3 million the label spent recording the album and the videos = $2.6 million.
Minus tax at about half = $1.3 million.
Split three ways = about $433,000 each.
Her answer on camera: "about $300,000, if that much."
The board doesn't show where the other $133,000 each went.
When they filed, they listed $3.5 million in debts. The following February they won two Grammys, and Chilli told the press room they were "broke as broke can be."
"Sold 10 million albums" tells you what the fans paid. It tells you almost nothing about what the singers got.
If you were 20 and signing that contract, which number would you have fought for: the advance, or the cents per album?
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Jordan Belfort was ordered to repay his victims $110.4 million. Hollywood turned his story into a film that grossed about $392 million. One of those victims, Alfred Vitt, lost $250,000 and got back about $8,000.
In the video below, 60 Minutes Australia, 2014. Listen to Belfort describe "the greatest ending to the story", then to what Vitt actually received.
Vitt was a retired dentist in Texas. Stratton Oakmont brokers cold-called him, sold him good stocks first, then penny stocks that regulators later found were manipulated. When he tried to sell, they wouldn't take no for an answer. He kept working until he was 70 to pay back the banks he had borrowed from.
Belfort pleaded guilty to fraud against 1,513 investors. In 2003 he was sentenced to four years and ordered to pay half his gross income to his victims once he was free.
By 2018 he had paid $12.8 million, mostly from property he gave up at sentencing. The Justice Department said he paid nothing in 2010 and $21,000 in 2011, while he had received more than $940,000 for the film rights.
Worked out.
$12.8 million of $110.4 million is 11.6 cents on the dollar.
Vitt's $8,000 of $250,000 is 3.2 cents.
Before his lawyer's fee.
A court said 100%. The payments say 11.6%.
"My goal one day would be to pay back all the money," Belfort says at the end. "No guarantees."
He still sells sales training. If you paid for one of his courses, should part of that money have gone to Vitt first?
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Prince did the math on Mariah Carey's $20 million record deal on live TV and called it a bad deal. He died in 2016 with no will. His estate was later valued at $156.4 million, and the tax bill alone was set to take close to half.
In the video below he works it out for Jay Leno. Listen to the question he asks at the end.
He spent two decades fighting over who owns his music. In the 1990s he wrote "slave" on his face over his Warner Bros. contract. By 2014 he had his master recordings back.
In April 2016 he died at Paisley Park, at 57. No wife, no children, no will. Under Minnesota law everything went to his six siblings and half-siblings.
The estate's administrator valued it at $82.3 million. The IRS said $163.2 million. They settled in 2022 at $156.4 million.
Worked out.
Federal estate tax: 40% on everything above about $5 million.
Minnesota: up to 16% more.
Together, close to half. On $156.4 million that is about $78 million, before a single lawyer was paid.
Lawyers and consultants were then paid tens of millions over six years.
Two of the six heirs died before it was settled. Three sold all or most of their shares to a New York music company, Primary Wave. When a judge closed the estate in August 2022, it was split almost evenly between that company and the families of the three oldest heirs.
Keep this part. He fought for twenty years over who owns the music. The one paper he never signed decided it anyway.
If you were one of his siblings, six years into the wait, would you have sold your share?
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Sam Bankman-Fried's parents are both Stanford law professors. While his exchange was losing $8 billion of its customers' money, FTX funds paid for a $16.4 million house in the Bahamas. The estate says it was in their names.
In the video below, weeks after the collapse, Andrew Ross Sorkin asks him about that house. Listen to how he explains whose it was.
Joseph Bankman and Barbara Fried taught law at Stanford for decades. Their son founded FTX in 2019. By 2022 it was one of the biggest crypto exchanges in the world.
In November 2022 it collapsed. In 2023 a jury convicted him of fraud. He got 25 years.
Against the parents. FTX's bankruptcy estate sued them, saying they discussed a $10 million cash gift from their son and the Bahamas property while the company was failing. Their lawyers called the claims "completely false".
For the parents. Customers are being paid back 119% of what they had on FTX. His parents now argue that no customer lost money.
The catch: the 119% is counted in dollars, at November 2022 prices. Bitcoin was about $16,000 then. It passed $100,000 two years later. A customer who had one bitcoin on FTX got back about $19,000.
A jury said fraud. The bankruptcy court says 119%.
Are they parents defending their son, or two law professors who should have asked who paid for the house?
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Priscilla Presley saved Elvis's estate when it was drowning in upkeep and taxes, and handed their daughter about $100 million. Forty years later she was in court against her granddaughter over what was left.
In the video below, 1982, she announces that Graceland will open to the public. Listen to the question about Colonel Parker, and to what she promises her 14-year-old daughter.
After Elvis's father died in 1979, Priscilla became one of the people running the estate for Lisa Marie. Graceland was draining it. Selling the house was on the table.
She chose tours instead. $500,000 to set it up. $5 a ticket. On June 7, 1982, the first day, 3,024 people came.
Worked out.
$500,000 at $5 a visitor is 100,000 visitors to get the money back.
Graceland now gets about half a million visitors a year.
In 1993 Lisa Marie turned 25 and the trust was hers, worth about $100 million. By 2016, her own lawsuit said, she had $14,000 in cash.
That same year she signed an amendment removing her mother as a trustee. Priscilla later said she never received it, and questioned the signature.
Lisa Marie died in January 2023. Priscilla went to court. Within months her granddaughter, Riley Keough, agreed to pay her $1 million and became the sole trustee.
Keep this part. Building a fortune and keeping it are different skills. One family had the first and lost the second in a single generation.
Did Priscilla earn her place at the table, or was Lisa Marie right to take it away?
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Ray Kroc bought McDonald's from the McDonald brothers in 1961 for $2.7 million. They kept their first restaurant, but not the right to put their own name on it. Kroc opened a McDonald's a block away and put it out of business.
In the video below Kroc explains why he loved the name McDonald's. Listen to what he compares it to.
Dick and Mac McDonald opened their first restaurant in San Bernardino, California, in 1940. Kroc was a 52-year-old milkshake-machine salesman when he walked in, in 1954.
He became their franchising agent. He wanted to grow fast. They didn't. By 1961 he wanted them out, and borrowed the money to do it.
It came to about $1 million each after tax. Their nephew later said there was also a handshake: 1% of future sales, forever. It was never written down and never paid. Kroc later said it was never binding.
The brothers renamed their restaurant The Big M. It closed within a few years.
The case for Kroc. The brothers had a great kitchen and no appetite for scale. He built the empire they never would have. Today McDonald's is worth more than $200 billion.
$2.7 million for the name. The name kept the rest.
Was Ray Kroc the man who built what the brothers never could, or the man who took their name and used it against them?
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Brian Wilson wrote "God Only Knows", "Good Vibrations" and "California Girls". In 1969 his father sold the rights to all of them for $700,000. Brian later said in a lawsuit that he never agreed to it.
In the video below Brian talks about his father. Listen to what he says he would ask him today.
Murry Wilson managed the Beach Boys in the early years, until his sons fired him in 1964. He kept control of the company that owned the songs, Sea of Tunes.
By 1969 the band's sales were falling. Murry decided the catalogue had peaked and sold it to Irving Music for $700,000.
In 1989 Brian sued. He said he had been defrauded, and that the signature on the deal may not have been his. He won millions in damages. He never got the songs back.
His father never had to answer it. Murry died in 1973, still believing he had sold at the top.
In 2021 Brian sold the rights he still had to Universal, for a reported $50 million. He died in 2025, at 82.
$700,000 for every song he wrote before 1969. $50 million for what was left.
Did Murry Wilson cash out a fading band at the right moment, or sell his son's life's work behind his back?
Ray Kroc bought McDonald's from the McDonald brothers in 1961 for $2.7 million. They kept their first restaurant, but not the right to put their own name on it. Kroc opened a McDonald's a block away and put it out of business.
In the video below Kroc explains why he loved the name McDonald's. Listen to what he compares it to.
Dick and Mac McDonald opened their first restaurant in San Bernardino, California, in 1940. Kroc was a 52-year-old milkshake-machine salesman when he walked in, in 1954.
He became their franchising agent. He wanted to grow fast. They didn't. By 1961 he wanted them out, and borrowed the money to do it.
It came to about $1 million each after tax. Their nephew later said there was also a handshake: 1% of future sales, forever. It was never written down and never paid. Kroc later said it was never binding.
The brothers renamed their restaurant The Big M. It closed within a few years.
The case for Kroc. The brothers had a great kitchen and no appetite for scale. He built the empire they never would have. Today McDonald's is worth more than $200 billion.
$2.7 million for the name. The name kept the rest.
Was Ray Kroc the man who built what the brothers never could, or the man who took their name and used it against them?