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Could you possibly elaborate on how the breakdown of an exit like Beme's (prior to CNN) could have resulted in Casey not taking much? I thought Beme was dumb,

• bspn 9y ago
  Not OP and I have no inside info, but if we take the $25m as given and assume that investors owned 20-30% on a $2m check with a vanilla preferred that brings the founders/team share down to somewhere in the the $17.5-20m range with the lion's share going to the founders. Sounds nice, right?! But, and this is admittedly a big assumption, this smelt like an acquihire at the time so I imagine the deal was structured in a way that allowed the financial investors to cash out with a respectable return while the founders committed to some form of earn-out to ensure their commitment and loyalty to making the platform a success for CNN. Given how quickly the shutdown occurred, you have to assume they didn't meet the metrics in the buy-out so will be leaving some (a lot?) of that purchase price on the table. If we assume a 50% discount that brings the net price down to under $10m split across a group of 10+ employees with the two founders presumably capturing about 80% of that. After tax ~ possibly at their prevailing income tax rate vs long-term capital gains ~ he may have realized a low-single digit million exit which is nothing to sneeze at for the vast majority of us especially given the quick turnaround. Now, if CNN negotiated hard on the earn-out or the investors had something other than 1x preferred it's possible that number is significantly lower, but none of us really know.