4 ms·

"eventually offering $100 million for the company plus an earnout of $25 million to be paid over four years" Terms, terms, TERMS people. I can't believe that w

by portman 16y ago

"eventually offering $100 million for the company plus an earnout of $25 million to be paid over four years" Terms, terms, TERMS people. I can't believe that with 40+ comments there isn't more discussion of the terms. It could have been $100M in Google stock on a 4-year vest, plus $25M cash on a 4-year earn-out. At those terms, it's really only a $25M deal if the founding team doesn't think they're going to sit around at Google for 4+ years. Basically, the one sentence above tells us very little about this purported offer and the reasoning for turning it down. I would wait a week for more details to emerge before jumping to any conclusions about bubbles, co-founder betrayal, or anything else.

austinB 16y ago
That is a very good point. The article gives no detailed term information other than the big looking number, $100 million. A sum that could come in any number of terms with most being worth significantly less then were it cash. I will say Dave Morin seems to have made some good calls in his day.
sfphotoarts 16y ago
why would the founding team leave with $75m worth of Google stock on the table, all they have to do is show up for three more years. Given a choice between a nice job at Google with a multi-million dollar salary doing the thing you love with the resources and infrastructure of Google behind you vs going it alone, the choice seems (no matter what the terms) like a poor one. It's not like Path have any really ground breaking technology. How defensible really is the idea?
- Timothee 16y ago
  Keep in mind that two of the co-founders are Dave Morin and Shawn Fanning. The former likely made many millions (real and paper money I'd think) as manager for the Facebook platform/Facebook Connect, the latter made many millions from Napster. So, even though this offer and this decision both leave me a bit shocked, they already have the nice job and the resources they want. (office close to the bay, downtown San Francisco/SoMA is also nicer than the drive down to Mountain View)
  - robryan 16y ago
    It does seem that the cofounders, as well as the simple domain name are a big part of the reason they can get an offer like this. It does seem though there are a heap of services out there doing basically the same thing and tweaking the parameters a bit, like the friends list size, sure they could end up quiet successful but it's a big gamble I guess only those already financially secure could afford to take. It does matter a bit about the terms to, who knows, maybe Google wanted to roll it into their upcoming offering instead of having it as a standalone which would be a deal break for those heavily invested in their concept.
- portman 16y ago
  "all they have to do is show up for three more years" That's a lot harder than you're making it sound. (Or maybe my sample is skewed.) I personally know one person who has walked away from millions and know of another half-dozen. "Phoning it in" for three years at a company you don't care about just to collect a big paycheck can be absolutely soul-crushing.

by portman 16y ago

austinB 16y ago

That is a very good point. The article gives no detailed term information other than the big looking number, $100 million. A sum that could come in any number of terms with most being worth significantly less then were it cash. I will say Dave Morin seems to have made some good calls in his day.

sfphotoarts 16y ago

why would the founding team leave with $75m worth of Google stock on the table, all they have to do is show up for three more years. Given a choice between a nice job at Google with a multi-million dollar salary doing the thing you love with the resources and infrastructure of Google behind you vs going it alone, the choice seems (no matter what the terms) like a poor one. It's not like Path have any really ground breaking technology. How defensible really is the idea?

Timothee 16y ago
Keep in mind that two of the co-founders are Dave Morin and Shawn Fanning. The former likely made many millions (real and paper money I'd think) as manager for the Facebook platform/Facebook Connect, the latter made many millions from Napster. So, even though this offer and this decision both leave me a bit shocked, they already have the nice job and the resources they want. (office close to the bay, downtown San Francisco/SoMA is also nicer than the drive down to Mountain View)
- robryan 16y ago
  It does seem that the cofounders, as well as the simple domain name are a big part of the reason they can get an offer like this. It does seem though there are a heap of services out there doing basically the same thing and tweaking the parameters a bit, like the friends list size, sure they could end up quiet successful but it's a big gamble I guess only those already financially secure could afford to take. It does matter a bit about the terms to, who knows, maybe Google wanted to roll it into their upcoming offering instead of having it as a standalone which would be a deal break for those heavily invested in their concept.
portman 16y ago
"all they have to do is show up for three more years" That's a lot harder than you're making it sound. (Or maybe my sample is skewed.) I personally know one person who has walked away from millions and know of another half-dozen. "Phoning it in" for three years at a company you don't care about just to collect a big paycheck can be absolutely soul-crushing.