6 ms·

The Email Zuckerberg Sent to Cut His Cofounder Out of Facebook (2012)

109 points by seek3r00 7y ago

ulfw 7y ago
It’s shocking to me how many people trust this guy (>40K employees, >1B ‘customers’ between Facebook, Instagram and Whatsapp).
- pg_is_a_butt 7y ago
  dumb fucks
  - deleted 7y ago
    [deleted]
- zxcb1 7y ago
  The world's most trusted guy, no?
  - eganist 7y ago
    A comment (dead by flags) alluded to the contempt Mark had for his users by calling them > dumb f###s in an IM conversation with a friend. Alas, for those who don't remember this, here's context: https://www.theregister.co.uk/2010/05/14/facebook_trust_dumb/ https://www.theregister.co.uk/2010/05/14/facebook_trust_dumb...
    - thrwaway69 7y ago
      I don't see that as too evil for a 19 year old founder 16 years ago. I have called users dumb internally for forcing me to let them give me admin access because they don't understand how permission system works and will complain.
- welder 7y ago
  I had the opposite perspective from this. Did you miss the part where Zuckerberg was trying to remove someone who was working on a different startup outside of Facebook?
- zaroth 7y ago
  It’s not at all shocking that a co-founder or early employee of a startup ends up becoming disinterested, starts working on something else on the side, while their shares continue vesting for months (assuming there’s even vesting happening at all). By the time the early employee leaves or is fired, they have an extremely disproportionate share of the company. This happens all the time. It’s probably the rare company that doesn’t end up with a wonky cap table by year 2 or 3 with shares that need to be adjusted with grants in order to properly reward the people who are actually doing the essential work of running the company. I’ve had it happen in all 3 companies I’ve ever started. In some cases you can have a discussion and you can get everyone to literally sign on the dotted line to make the new share grants. In other cases, it’s a massive issue just trying to refresh the option pool because you want unanimous shareholder consent (exactly to avoid issues down the road) and there’s an early employee with Founder’s shares who ghosted the company and literally won’t answer their phone. Don’t feel sorry for Eduardo. The guy did a couple years of work and ended up a billionaire.
  - wtvanhest 7y ago
    I'm a huge believer that the way equity is distributed is entirely unfair to early stage employees bc founders and boards can and do change terms post vest. But, I am rational and want to understand how it is fair to change someone's earnings that everyone agreed to later. Can you help me understand why it makes sense?
    - SpicyLemonZest 7y ago
      Imagine you and two of your friends do a startup, splitting ownership 65/30/5. Early in its life, you and the 5% guy realize that the company needs to move to Austin (it's oil tech or whatever); the third says you can go but she won't. Then while the two of you put your full-time efforts into the company, she goes around doing her own thing. Maybe she does an internship at Lehman, or works on her own personal startup, but in general she just doesn't do much to help the company grow or get funding. From your perspective, letting her have 30% forever isn't really fair, right? In a sense it's what you agreed to, but you agreed to it under the premise that you'd be getting her help building the company, and she's decided not to provide that.
welder 7y ago
So instead of re-issue stock, Zuckerberg should have had a vesting period and fired Saverin?
JohnJamesRambo 7y ago
“he might have adverse reaction initially.”
- bryanrasmussen 7y ago
  As time goes by he'll see it was the best thing for me!
seattle_spring 7y ago
This happens to startup employees who still work for their startup on a daily basis. Crazy to me that founders don't bat an eye at screwing employees, but everyone seems to be out for blood just because some FB founder who left the company only got a gazillion dollars instead of 3 gazillion.
- TAForObvReasons 7y ago
  This is a community of founders and soon-to-be founders, many members of whom have received money as a result of FB, so the reaction isn't totally surprising.
  - throwaway2048 7y ago
    The club of temporarily embarrassed billionaires
- krawokaliz 7y ago
  Founders are bloodsuckers.
- blihp 7y ago
  I agree with your point that getting screwed happens all the time to people who put much more blood, sweat and tears into these companies. Doesn't make it right regardless of who it happens to. According to the popular retelling of the story, he didn't leave the company... he was pushed out. Then he had to sue to get his gazillion dollars. It's entirely possible that there could have been an argument made that Saverin wasn't living up to his end of things, his vision didn't align with where the company was going etc. and that he should accept a reduced interest in the company for those or any number of reasons... but that's not what happened: they tried to quietly and specifically dilute away his interest in the company. Worst case, if they made that argument and Saverin said no, Zuck could have said 'then screw it, let's let this thing die' and when it did swooped in with other partners/investors and picked up the assets for pennies and restarted under new ownership. Could that have risked everything? Possibly, but going the way they did did so as well... they're lucky they got out of it for only a few billion.
- 7y ago
acvny 7y ago
This article must be paid PR cleanup
- antonf 7y ago
  Did Mark Zuckerberg need PR cleanup in 2012?
  - grawprog 7y ago
    To be fair, he's needed PR cleanup since the beginning of facebook.
adonese 7y ago
In case you just want to skip into Zuck email part “This email should probably be attorney-client privileged, not quite how to do that though. Anyhow, Sean and I have agreed that a price of one-half cent per share is the way to go for now. We think we can maybe almost justify and if not, we'll just deal with it later. We also agreed that if the company bonusing us the amount we need for the shares, plus tax, is a good solution to the problem of us all being completely broke. As far as Eduardo goes, I think it's safe to ask for his permission to make grants. Especially if we do it in conjunction with raising money. It's probably even OK to say how many shares we're adding to the pool. It's probably less OK to tell him who's getting the shares, just because he might have adverse reaction initially. But I think we may even be able to make him understand that. Is there a way to do this without making it painfully apparent to him that he's being diluted to 10%? OK, that's all for now. I'll send you the list of grants I need made in another email in a second. Sean can send you grants for his people when he stops coughing up his lungs. Hope you guys both feel better, Mark”
- mygo 7y ago
  This echoes quite a few of my experiences. Seems to be par for the course. Once money comes into play, you get the privilege of witnessing all kinds of aspects of human nature. Watch your back.
kyleblarson 7y ago
"the guy everyone now hates because he's renouncing his US citizenship in order to avoid a lot of taxes". That's a bit of a stretch isn't it?
- dayaz36 7y ago
  lol I was thinking the same. I don't think anyone knows or cares...media just makes stuff up as they go
- zwily 7y ago
  When this article was written (...8 years ago...) that line made more sense.
fit2rule 7y ago
I've been cut out of some pretty significant deals in my time, one of them would've made me quite wealthy, and all I can say is - sucks to be this guy. Greed and hubris are probably one of the biggest barriers to entrepreneurial participation. I sure wish there had been at least some way to mediate my particular dispute, but nevertheless: this is why you lawyer up.
9c8675a8 7y ago
INB4 "nationalism is bad", except when people try to avoid nationalism by avoiding theft.
julienreszka 7y ago
How do those documents get leaked? Isn't this a breach of privacy? Can someone please explain this to me?
- Keverw 7y ago
  Probably if there was a lawsuit, these documents would be in the public record then as part of the discovery process.
popup21 7y ago
He would do Steve Jobs proud...the asshole of our generation
mctt 7y ago
In case anyone is wondering here are the net worth figures as of Sunday 20 January 2020: Eduardo Saverin Net worth: 10.1 billion USD (June 2019) Dustin Moskovitz Net worth: 13.4 billion USD (2020) Sean Parker Net worth: 2.7 billion USD (2020) Mark Zuckerberg Net worth: 80.7 billion USD (January 2020) Chris Hughes Net worth: 430 USD million (2017) Sorry if I have missed anyone off this list, it is just for simple comparison.

109 points by seek3r00 7y ago

ulfw 7y ago

It’s shocking to me how many people trust this guy (>40K employees, >1B ‘customers’ between Facebook, Instagram and Whatsapp).

pg_is_a_butt 7y ago
dumb fucks
- deleted 7y ago
  [deleted]
zxcb1 7y ago
The world's most trusted guy, no?
- eganist 7y ago
  A comment (dead by flags) alluded to the contempt Mark had for his users by calling them > dumb f###s in an IM conversation with a friend. Alas, for those who don't remember this, here's context: https://www.theregister.co.uk/2010/05/14/facebook_trust_dumb/ https://www.theregister.co.uk/2010/05/14/facebook_trust_dumb...
  - thrwaway69 7y ago
    I don't see that as too evil for a 19 year old founder 16 years ago. I have called users dumb internally for forcing me to let them give me admin access because they don't understand how permission system works and will complain.
welder 7y ago
I had the opposite perspective from this. Did you miss the part where Zuckerberg was trying to remove someone who was working on a different startup outside of Facebook?
zaroth 7y ago
It’s not at all shocking that a co-founder or early employee of a startup ends up becoming disinterested, starts working on something else on the side, while their shares continue vesting for months (assuming there’s even vesting happening at all). By the time the early employee leaves or is fired, they have an extremely disproportionate share of the company. This happens all the time. It’s probably the rare company that doesn’t end up with a wonky cap table by year 2 or 3 with shares that need to be adjusted with grants in order to properly reward the people who are actually doing the essential work of running the company. I’ve had it happen in all 3 companies I’ve ever started. In some cases you can have a discussion and you can get everyone to literally sign on the dotted line to make the new share grants. In other cases, it’s a massive issue just trying to refresh the option pool because you want unanimous shareholder consent (exactly to avoid issues down the road) and there’s an early employee with Founder’s shares who ghosted the company and literally won’t answer their phone. Don’t feel sorry for Eduardo. The guy did a couple years of work and ended up a billionaire.
- wtvanhest 7y ago
  I'm a huge believer that the way equity is distributed is entirely unfair to early stage employees bc founders and boards can and do change terms post vest. But, I am rational and want to understand how it is fair to change someone's earnings that everyone agreed to later. Can you help me understand why it makes sense?
  - SpicyLemonZest 7y ago
    Imagine you and two of your friends do a startup, splitting ownership 65/30/5. Early in its life, you and the 5% guy realize that the company needs to move to Austin (it's oil tech or whatever); the third says you can go but she won't. Then while the two of you put your full-time efforts into the company, she goes around doing her own thing. Maybe she does an internship at Lehman, or works on her own personal startup, but in general she just doesn't do much to help the company grow or get funding. From your perspective, letting her have 30% forever isn't really fair, right? In a sense it's what you agreed to, but you agreed to it under the premise that you'd be getting her help building the company, and she's decided not to provide that.

welder 7y ago

So instead of re-issue stock, Zuckerberg should have had a vesting period and fired Saverin?

JohnJamesRambo 7y ago

“he might have adverse reaction initially.”

bryanrasmussen 7y ago
As time goes by he'll see it was the best thing for me!

seattle_spring 7y ago

This happens to startup employees who still work for their startup on a daily basis. Crazy to me that founders don't bat an eye at screwing employees, but everyone seems to be out for blood just because some FB founder who left the company only got a gazillion dollars instead of 3 gazillion.

TAForObvReasons 7y ago
This is a community of founders and soon-to-be founders, many members of whom have received money as a result of FB, so the reaction isn't totally surprising.
- throwaway2048 7y ago
  The club of temporarily embarrassed billionaires
krawokaliz 7y ago
Founders are bloodsuckers.
blihp 7y ago
I agree with your point that getting screwed happens all the time to people who put much more blood, sweat and tears into these companies. Doesn't make it right regardless of who it happens to. According to the popular retelling of the story, he didn't leave the company... he was pushed out. Then he had to sue to get his gazillion dollars. It's entirely possible that there could have been an argument made that Saverin wasn't living up to his end of things, his vision didn't align with where the company was going etc. and that he should accept a reduced interest in the company for those or any number of reasons... but that's not what happened: they tried to quietly and specifically dilute away his interest in the company. Worst case, if they made that argument and Saverin said no, Zuck could have said 'then screw it, let's let this thing die' and when it did swooped in with other partners/investors and picked up the assets for pennies and restarted under new ownership. Could that have risked everything? Possibly, but going the way they did did so as well... they're lucky they got out of it for only a few billion.
7y ago

acvny 7y ago

This article must be paid PR cleanup

antonf 7y ago
Did Mark Zuckerberg need PR cleanup in 2012?
- grawprog 7y ago
  To be fair, he's needed PR cleanup since the beginning of facebook.

adonese 7y ago

In case you just want to skip into Zuck email part “This email should probably be attorney-client privileged, not quite how to do that though. Anyhow, Sean and I have agreed that a price of one-half cent per share is the way to go for now. We think we can maybe almost justify and if not, we'll just deal with it later. We also agreed that if the company bonusing us the amount we need for the shares, plus tax, is a good solution to the problem of us all being completely broke. As far as Eduardo goes, I think it's safe to ask for his permission to make grants. Especially if we do it in conjunction with raising money. It's probably even OK to say how many shares we're adding to the pool. It's probably less OK to tell him who's getting the shares, just because he might have adverse reaction initially. But I think we may even be able to make him understand that. Is there a way to do this without making it painfully apparent to him that he's being diluted to 10%? OK, that's all for now. I'll send you the list of grants I need made in another email in a second. Sean can send you grants for his people when he stops coughing up his lungs. Hope you guys both feel better, Mark”

mygo 7y ago
This echoes quite a few of my experiences. Seems to be par for the course. Once money comes into play, you get the privilege of witnessing all kinds of aspects of human nature. Watch your back.

kyleblarson 7y ago

"the guy everyone now hates because he's renouncing his US citizenship in order to avoid a lot of taxes". That's a bit of a stretch isn't it?

dayaz36 7y ago
lol I was thinking the same. I don't think anyone knows or cares...media just makes stuff up as they go
zwily 7y ago
When this article was written (...8 years ago...) that line made more sense.

fit2rule 7y ago

I've been cut out of some pretty significant deals in my time, one of them would've made me quite wealthy, and all I can say is - sucks to be this guy. Greed and hubris are probably one of the biggest barriers to entrepreneurial participation. I sure wish there had been at least some way to mediate my particular dispute, but nevertheless: this is why you lawyer up.

9c8675a8 7y ago

INB4 "nationalism is bad", except when people try to avoid nationalism by avoiding theft.

julienreszka 7y ago

How do those documents get leaked? Isn't this a breach of privacy? Can someone please explain this to me?

Keverw 7y ago
Probably if there was a lawsuit, these documents would be in the public record then as part of the discovery process.

popup21 7y ago

He would do Steve Jobs proud...the asshole of our generation

mctt 7y ago

In case anyone is wondering here are the net worth figures as of Sunday 20 January 2020: Eduardo Saverin Net worth: 10.1 billion USD (June 2019) Dustin Moskovitz Net worth: 13.4 billion USD (2020) Sean Parker Net worth: 2.7 billion USD (2020) Mark Zuckerberg Net worth: 80.7 billion USD (January 2020) Chris Hughes Net worth: 430 USD million (2017) Sorry if I have missed anyone off this list, it is just for simple comparison.