4 ms·

I would imagine an IPO is a lot different than another type of exit, like an acquisition. I've been through two acquisitions and both went terribly for just abo

I would imagine an IPO is a lot different than another type of exit, like an acquisition. I've been through two acquisitions and both went terribly for just about everyone but the founders. For an IPO I haven't been through one of those but all of my friends just basically stare at the stock price all day every day and brag to their friends about how much money their stocks are worth.

hinkley 7y ago
One acquisition in particular really gave me the vibe that I’d been sold like cattle. From what I hear that is frequently enough exactly what has happened. Founders sometimes have part of their pay structure tied up in retention numbers. They have an incentive to stretch the truth until those milestones are met. The first time I was in a sale, a bunch of us had options that were worth $40k+ On paper, which isn’t amazing but for your first one out it’s pretty cool. But they couldn’t take in our culture like they said they wanted to, so it started to unravel almost immediately. What I found out later is that there’s a kind of merger where the buyer swaps stock for your liquid assets. The founder got payed less cash than the company had in cash and accounts receivable. All that money went into payroll as the combined company cratered in slow motion. Ten months later our options were underwater, and all of that imaginary money we were going to get was lost. By the time I had another set of options worth anything, it didn’t take much for a coworker to talk me into selling them the moment I could. Bought my first MacBook for starters, and started a love affair with a bag company. Ultimately I made more money off of the annual bonus than the stock, and got out three weeks after the bonus was paid. I put part of that money into Apple stock, which quintupled within the next couple years. And I’m still not rich.

hinkley 7y ago

One acquisition in particular really gave me the vibe that I’d been sold like cattle. From what I hear that is frequently enough exactly what has happened. Founders sometimes have part of their pay structure tied up in retention numbers. They have an incentive to stretch the truth until those milestones are met. The first time I was in a sale, a bunch of us had options that were worth $40k+ On paper, which isn’t amazing but for your first one out it’s pretty cool. But they couldn’t take in our culture like they said they wanted to, so it started to unravel almost immediately. What I found out later is that there’s a kind of merger where the buyer swaps stock for your liquid assets. The founder got payed less cash than the company had in cash and accounts receivable. All that money went into payroll as the combined company cratered in slow motion. Ten months later our options were underwater, and all of that imaginary money we were going to get was lost. By the time I had another set of options worth anything, it didn’t take much for a coworker to talk me into selling them the moment I could. Bought my first MacBook for starters, and started a love affair with a bag company. Ultimately I made more money off of the annual bonus than the stock, and got out three weeks after the bonus was paid. I put part of that money into Apple stock, which quintupled within the next couple years. And I’m still not rich.