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I might choose a stronger word - gross, for instance. I'm all for founder success, but that sounds a lot to me like the employee equity pool suffered.

deleted 8y ago
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darawk 8y ago
Why? 50% of 7.5 billion is still a lot of money. Github doesn't have that many employees. In fact, they have 745 employees. That averages out to 4.6 million per employee. Now, there's probably a good bit of VC money in there diluting that, but i'd bet not by more than 50%. I think the employee equity pool did just fine here.
- aetherson 8y ago
  You think that the employee equity pool was 25% of the company? That's pretty high. Not maybe completely unprecedented, but I'd expect considerably lower.
  - kjksf 8y ago
    Founders apparently got 50%. GitHub had 2 funding events. https://www.crunchbase.com/funding_round/github-series-b--49182d09 https://www.crunchbase.com/funding_round/github-series-b--49... $250M at pre-money valuation of $1.8B i.e. 13%. https://www.crunchbase.com/funding_round/github-series-a--832c3557 https://www.crunchbase.com/funding_round/github-series-a--83... $100M at valuation of $650 i.e. 15% So ~28% to VC, 50% to founders, which leaves 22% How much of that was actually allocated, I don't know.
adventured 8y ago
GitHub has, what, 600-700 employees? Most of those have probably been hired in the last five years. Ownership distribution was likely relatively slow, given the way GitHub proceeded as a business (slow ramp, only took on a series A four years after the founding). Gates had 45% of Microsoft after its IPO after a similar length of time (a decade) that GitHub has existed. His position rapidly diluted after that with increased share-based compensation and Microsoft's size ballooning. Allen + Gates + Ballmer probably had 65% of Microsoft after the IPO. Larry Ellison still holds 27% of Oracle after 40 years. I don't think the GitHub distribution outcome is particularly historically unusual. One could argue obviously that from a strictly subjective moral basis that it's still not enough distribution. The only thing historically unusual, is that the venture capitalists got such a small share of the outcome, courtesy of GitHub not drowning themselves in funding across a decade. In most cases these days, the VCs would be taking up a far larger portion of the founder's 50% position. I'd guess the employees are getting 20%-25% of the $7.5 billion. That's maybe $2.25m to $2.75m average per employee, assuming a 600-700 employee range.
ramen-san 8y ago
I understand your visceral reaction here, and agree that equity pools need to be increased in general. But isn’t that really a reflection on all the folks who choose to join a startup for the prevailing equity packages offered today? The reality is unless you have founder or very early employee equity, it will take a Facebook size outcome to Be truly life changing. Having been part of a billion dollar acquisition myself, I can attest that for the vast majority of people (myself included), it was equivalent to a nice bonus. Perhaps more people need to realize that and internalize that before they forego the higher compensation, and easier workload of an established company? The only thing that will realistically get founders to share more equity is for the market to demand it. Personally I would not sign up for another startup journey unless I felt there was substantially more upside on the table. Otherwise, you’re better off joining BigCo or go further and start your own thing and get founder equity. FWIW, I wouldn’t begrudge the Github founders... they’ve done an amazing job over a very long time. They rolled the dice and made it happen. Hats off to them!
- tomp 8y ago
  Just keep in mind that it's not just about the money. For example, in an early-stage, rapidly-growing startup, you're also bound to gain much more experience (managing, sales, operations, etc) much more quickly than in many established companies. So even if you just get a nice salary and a nice bonus, your career could still be leaps ahead of a corporate worker-bee.

deleted 8y ago

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darawk 8y ago

Why? 50% of 7.5 billion is still a lot of money. Github doesn't have that many employees. In fact, they have 745 employees. That averages out to 4.6 million per employee. Now, there's probably a good bit of VC money in there diluting that, but i'd bet not by more than 50%. I think the employee equity pool did just fine here.

aetherson 8y ago
You think that the employee equity pool was 25% of the company? That's pretty high. Not maybe completely unprecedented, but I'd expect considerably lower.
- kjksf 8y ago
  Founders apparently got 50%. GitHub had 2 funding events. https://www.crunchbase.com/funding_round/github-series-b--49182d09 https://www.crunchbase.com/funding_round/github-series-b--49... $250M at pre-money valuation of $1.8B i.e. 13%. https://www.crunchbase.com/funding_round/github-series-a--832c3557 https://www.crunchbase.com/funding_round/github-series-a--83... $100M at valuation of $650 i.e. 15% So ~28% to VC, 50% to founders, which leaves 22% How much of that was actually allocated, I don't know.

adventured 8y ago

GitHub has, what, 600-700 employees? Most of those have probably been hired in the last five years. Ownership distribution was likely relatively slow, given the way GitHub proceeded as a business (slow ramp, only took on a series A four years after the founding). Gates had 45% of Microsoft after its IPO after a similar length of time (a decade) that GitHub has existed. His position rapidly diluted after that with increased share-based compensation and Microsoft's size ballooning. Allen + Gates + Ballmer probably had 65% of Microsoft after the IPO. Larry Ellison still holds 27% of Oracle after 40 years. I don't think the GitHub distribution outcome is particularly historically unusual. One could argue obviously that from a strictly subjective moral basis that it's still not enough distribution. The only thing historically unusual, is that the venture capitalists got such a small share of the outcome, courtesy of GitHub not drowning themselves in funding across a decade. In most cases these days, the VCs would be taking up a far larger portion of the founder's 50% position. I'd guess the employees are getting 20%-25% of the $7.5 billion. That's maybe $2.25m to $2.75m average per employee, assuming a 600-700 employee range.

ramen-san 8y ago

I understand your visceral reaction here, and agree that equity pools need to be increased in general. But isn’t that really a reflection on all the folks who choose to join a startup for the prevailing equity packages offered today? The reality is unless you have founder or very early employee equity, it will take a Facebook size outcome to Be truly life changing. Having been part of a billion dollar acquisition myself, I can attest that for the vast majority of people (myself included), it was equivalent to a nice bonus. Perhaps more people need to realize that and internalize that before they forego the higher compensation, and easier workload of an established company? The only thing that will realistically get founders to share more equity is for the market to demand it. Personally I would not sign up for another startup journey unless I felt there was substantially more upside on the table. Otherwise, you’re better off joining BigCo or go further and start your own thing and get founder equity. FWIW, I wouldn’t begrudge the Github founders... they’ve done an amazing job over a very long time. They rolled the dice and made it happen. Hats off to them!

tomp 8y ago
Just keep in mind that it's not just about the money. For example, in an early-stage, rapidly-growing startup, you're also bound to gain much more experience (managing, sales, operations, etc) much more quickly than in many established companies. So even if you just get a nice salary and a nice bonus, your career could still be leaps ahead of a corporate worker-bee.