7 ms·

I wonder how he doesn't have more assets after he sold his company to Uber for $680 millions

manigandham 7y ago
Most founders make nowhere near the actual sale price for a VC-funded company, and Otto had 4 co-founders.
rockinghigh 7y ago
1) He did not own 100% of that company. 2) There were 4 cofounders and 90 employees. 3) He got paid mostly in Uber shares that vested over time and he left before they vested. https://www.cnbc.com/2017/12/14/ieee-analysis-shows-uber-paid-as-little-as-220-million-for-otto.html https://www.cnbc.com/2017/12/14/ieee-analysis-shows-uber-pai...
- tomerico 7y ago
  Good link. It looks like half of the purchase price was supposed to go to Anthony, but under a vesting schedule.
user982 7y ago
Times are tough.
- jeron 7y ago
  "coronavirus destroyed my portfolio"
par 7y ago
yolo'ed it all on r/wallstreetbets.
- arcticbull 7y ago
  Now that hits close to home -- I mean, if he'd timed the drop, he'd probably be a trillionaire by now.
  - anonuser123456 7y ago
    Counterparty risk; something the WSB crowd is going to painfully learn in the next few months :P
    - manigandham 7y ago
      Are you predicting banks going insolvent?
      - anonuser123456 7y ago
        - Beer virus is about to eat Seattle and SF Bay Area. If it does... then it will eat all the US eventually. Hospitals overrun etc. People won't be working. Most disruptive event since WW2. - Supply chains run dry mid April. Huge supply shock... and will be arriving right as the beer virus starts to crush the west coast. No one has a risk model that can price those things. It's entirely possible large institutions will go insolvent in the chaos.
        yellow_lead 7y ago
        People are working in China right now, but boy is this getting off topic
        humanlion87 7y ago
        Seems like a pretty big assumption that those two cities would be eaten. It's definitely spreading and causing disruption, but I don't really see how it's going to grind both cities to a halt. Especially with the current amount of information we have regarding the virus. We need to know more before we can draw such conclusions. China seems to be recovering already.
specular 7y ago
Very difficult to answer this with specificity, but in general there are a number of factors that influence the amount of cash you ultimately net from a sale, including: - Cap table: what % is owed to other founders, investors, employees, etc? - The total acquisition price may include substantial legal and other fees that will lower the actual amount received by the owners or shareholders. - How much of the acquisition is financed through cash vs. equity? Equity may vest over a certain time period, and be subject to certain requirements (your sustained performance, ability to clear legal scrutiny, etc.). - Taxes. Taking all of this (and probably more) into consideration, it doesn't seem unreasonable for a founder to ultimately net <10% of the total sale price. Again, this is all wild speculation in this particular case.
- loeg 7y ago
  His company existed for a seven months in 2016 before being bought by Uber. It isn't clear (to me) if there were third party investors or what the cap table was, broadly. Purportedly 90 employees at time of sale to Uber.
  - ivanvanderbyl 7y ago
    I don't know what the CGT situation is in America, but in Australia of you own an asset (shares, property, etc) for less than 12 months before sale, capital gains tax kicks up to about 50%.
    - daemin 7y ago
      Australian here as well. If you own things and sell them for a capital loss you get a tax credit to use later. If you sell for a capital gain within 12 months then you will pay tax on the full amount of profit from the sale. For individuals this is just added to your income tax. If you sell for a capital gain having held the asset for over 12 months you get a 50% discount to how much profit is taxed. The tax credit for a capital loss can be used to offset a capital gain but it gets applied before any discount is applied. I am not an accountant but I have listened to one.
garmaine 7y ago
He bought a large house in Florida?
- mfkp 7y ago
  That's an asset.
  - gnicholas 7y ago
    I think GP is referring to Florida’s generous homestead exception, which allows a debtor to keep his/her home (regardless of opulence) despite creditors’ claims.
    - mfkp 7y ago
      Ah interesting, didn't know about that. Seems like a easily exploitable loophole if so.
      - toomuchtodo 7y ago
        It’s is, but the benefits outweigh the moral hazard.
      - jdhn 7y ago
        Maybe for cases like this that involve literally millions of dollars, but it really helps normal people from becoming homeless if they fall on hard times for whatever reason. Source: Family members went through bankruptcy in Florida and were able to get back on their feet much quicker because their house couldn't be seized.
        jjeaff 7y ago
        Most states have a homestead exemption. But most states also have a limit on the value of that homestead. Sure, you shouldn't lose your reasonable family home over debt. But that doesn't mean people like OJ Simpson should be able to keep their multi million dollar estates even though they have filed for bankruptcy.
throw03172019 7y ago
I wonder if he missed out on his earn out because he was fired from Uber. I’m not sure how that all works legally. Anyone know?
humanlion87 7y ago
Or maybe he off-shored the rest of his money? This < $100mil are the assets that are under his name and the rest are in tax havens/under different shell companies? Not sure whether that is possible. But it seems like rich people always have multiple ways of hiding their money.
- deleted 7y ago
  [deleted]
- pembrook 7y ago
  This is a mid-century Hollywood myth that just won't die. Even when it was still possible to do so, a tiny, tiny minority of Rich Americans were actually evading taxes by hiding money overseas. Today, it's virtually impossible to hide money overseas as an American after FATCA and various other crackdowns unless you are willing to entirely give up your US citizenship. Since the $USD is the reserve currency of the world, the US government has enormous leverage in mandating foreign banks to report on the assets of every single US citizen with money abroad. In fact, foreign banks are so scared right now, many will refuse to even deal with Americans outright. It's a huge draconian nightmare for expats--99% of whom are not rich by any means. Ironically, if you're looking to do something nefarious, the best place to do so is actually right here in the US! Numerous states allow you to create anonymous corporations and trusts.
  - JohnJamesRambo 7y ago
    Have you ever heard of the Panama Papers?
    - Mvandenbergh 7y ago
      The above is the reason why there were very few Americans in those papers. They're not worth the risk.
uuilly 7y ago
The total deal with Uber was worth about 20M upfront. The rest was milestone driven. Milestones didn’t happen bc Anthony got fired and there was a fatality that shut the program down.
ur-whale 7y ago
>I wonder how he doesn't have more assets after he sold his company to Uber for $680 millions He may have realized early that Bitcoin is unconfiscatable.
- distances 7y ago
  I'm not sure how serious your were with the comment, but law enforcement and customs agencies around the world hold now considerable amounts of bitcoins.

Most founders make nowhere near the actual sale price for a VC-funded company, and Otto had 4 co-founders.

1) He did not own 100% of that company. 2) There were 4 cofounders and 90 employees. 3) He got paid mostly in Uber shares that vested over time and he left before they vested. https://www.cnbc.com/2017/12/14/ieee-analysis-shows-uber-paid-as-little-as-220-million-for-otto.html https://www.cnbc.com/2017/12/14/ieee-analysis-shows-uber-pai...

tomerico 7y ago
Good link. It looks like half of the purchase price was supposed to go to Anthony, but under a vesting schedule.

user982 7y ago

Times are tough.

jeron 7y ago
"coronavirus destroyed my portfolio"

par 7y ago

yolo'ed it all on r/wallstreetbets.

arcticbull 7y ago
Now that hits close to home -- I mean, if he'd timed the drop, he'd probably be a trillionaire by now.
- anonuser123456 7y ago
  Counterparty risk; something the WSB crowd is going to painfully learn in the next few months :P
  - manigandham 7y ago
    Are you predicting banks going insolvent?
    - anonuser123456 7y ago
      - Beer virus is about to eat Seattle and SF Bay Area. If it does... then it will eat all the US eventually. Hospitals overrun etc. People won't be working. Most disruptive event since WW2. - Supply chains run dry mid April. Huge supply shock... and will be arriving right as the beer virus starts to crush the west coast. No one has a risk model that can price those things. It's entirely possible large institutions will go insolvent in the chaos.
      - yellow_lead 7y ago
        People are working in China right now, but boy is this getting off topic
      - humanlion87 7y ago
        Seems like a pretty big assumption that those two cities would be eaten. It's definitely spreading and causing disruption, but I don't really see how it's going to grind both cities to a halt. Especially with the current amount of information we have regarding the virus. We need to know more before we can draw such conclusions. China seems to be recovering already.

specular 7y ago

Very difficult to answer this with specificity, but in general there are a number of factors that influence the amount of cash you ultimately net from a sale, including: - Cap table: what % is owed to other founders, investors, employees, etc? - The total acquisition price may include substantial legal and other fees that will lower the actual amount received by the owners or shareholders. - How much of the acquisition is financed through cash vs. equity? Equity may vest over a certain time period, and be subject to certain requirements (your sustained performance, ability to clear legal scrutiny, etc.). - Taxes. Taking all of this (and probably more) into consideration, it doesn't seem unreasonable for a founder to ultimately net <10% of the total sale price. Again, this is all wild speculation in this particular case.

loeg 7y ago
His company existed for a seven months in 2016 before being bought by Uber. It isn't clear (to me) if there were third party investors or what the cap table was, broadly. Purportedly 90 employees at time of sale to Uber.
- ivanvanderbyl 7y ago
  I don't know what the CGT situation is in America, but in Australia of you own an asset (shares, property, etc) for less than 12 months before sale, capital gains tax kicks up to about 50%.
  - daemin 7y ago
    Australian here as well. If you own things and sell them for a capital loss you get a tax credit to use later. If you sell for a capital gain within 12 months then you will pay tax on the full amount of profit from the sale. For individuals this is just added to your income tax. If you sell for a capital gain having held the asset for over 12 months you get a 50% discount to how much profit is taxed. The tax credit for a capital loss can be used to offset a capital gain but it gets applied before any discount is applied. I am not an accountant but I have listened to one.

garmaine 7y ago

He bought a large house in Florida?

mfkp 7y ago
That's an asset.
- gnicholas 7y ago
  I think GP is referring to Florida’s generous homestead exception, which allows a debtor to keep his/her home (regardless of opulence) despite creditors’ claims.
  - mfkp 7y ago
    Ah interesting, didn't know about that. Seems like a easily exploitable loophole if so.
    - toomuchtodo 7y ago
      It’s is, but the benefits outweigh the moral hazard.
    - jdhn 7y ago
      Maybe for cases like this that involve literally millions of dollars, but it really helps normal people from becoming homeless if they fall on hard times for whatever reason. Source: Family members went through bankruptcy in Florida and were able to get back on their feet much quicker because their house couldn't be seized.
      - jjeaff 7y ago
        Most states have a homestead exemption. But most states also have a limit on the value of that homestead. Sure, you shouldn't lose your reasonable family home over debt. But that doesn't mean people like OJ Simpson should be able to keep their multi million dollar estates even though they have filed for bankruptcy.

throw03172019 7y ago

I wonder if he missed out on his earn out because he was fired from Uber. I’m not sure how that all works legally. Anyone know?

humanlion87 7y ago

Or maybe he off-shored the rest of his money? This < $100mil are the assets that are under his name and the rest are in tax havens/under different shell companies? Not sure whether that is possible. But it seems like rich people always have multiple ways of hiding their money.

deleted 7y ago
[deleted]
pembrook 7y ago
This is a mid-century Hollywood myth that just won't die. Even when it was still possible to do so, a tiny, tiny minority of Rich Americans were actually evading taxes by hiding money overseas. Today, it's virtually impossible to hide money overseas as an American after FATCA and various other crackdowns unless you are willing to entirely give up your US citizenship. Since the $USD is the reserve currency of the world, the US government has enormous leverage in mandating foreign banks to report on the assets of every single US citizen with money abroad. In fact, foreign banks are so scared right now, many will refuse to even deal with Americans outright. It's a huge draconian nightmare for expats--99% of whom are not rich by any means. Ironically, if you're looking to do something nefarious, the best place to do so is actually right here in the US! Numerous states allow you to create anonymous corporations and trusts.
- JohnJamesRambo 7y ago
  Have you ever heard of the Panama Papers?
  - Mvandenbergh 7y ago
    The above is the reason why there were very few Americans in those papers. They're not worth the risk.

uuilly 7y ago

The total deal with Uber was worth about 20M upfront. The rest was milestone driven. Milestones didn’t happen bc Anthony got fired and there was a fatality that shut the program down.

ur-whale 7y ago

>I wonder how he doesn't have more assets after he sold his company to Uber for $680 millions He may have realized early that Bitcoin is unconfiscatable.

distances 7y ago
I'm not sure how serious your were with the comment, but law enforcement and customs agencies around the world hold now considerable amounts of bitcoins.