When budding entrepreneurs receive a boatload of shares of their likely-to-go public startup, those with financial planners often end up hedging those bets by selling some shares.

In so doing, they may limit their upside but also lock in a minimum net worth and protect themselves from losing everything if those share prices drop to zero, an all-too common occurrence. The strategy has kept many an entrepreneur from being wiped out when his company failed to take off.

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