5 ms·

I've seen similar sentiment being repeated about Sahil, even by other successful founders like Nathan Berry. It is a bit unfair to look at everything in hindsi

by adamhp 6y ago

I've seen similar sentiment being repeated about Sahil, even by other successful founders like Nathan Berry. It is a bit unfair to look at everything in hindsight and assume Sahil acted maliciously. He did what he could to scrap together the resources to save a failing company. It's not like he ran some sort of shell game to rob the original contributors of their equity. People always view the past in this way and it is incredibly biased. You have to go back and step forward in time with each piece of information as it was available, and at the time it appeared the company was surely going to fail. In any case, I'd be curious to hear from some of the original contributors as to how they felt they were treated or how Sahil behaved.

PragmaticPulp 6y ago
Frankly, the investors who set the initial valuation (presumably used to set the strike price of the employee options) and later the $0 valuation (rendering the options worthless) and then giving away the IP that they declared worthless (despite the company not fundamentally changing) deserve a lot of the scrutiny. If the company had simply been left to make their own choices like laying off the employees and buying out investors, this would have been a different story.
- jonfromsf 6y ago
  I mean strike prices are usually unrealistically LOW, as low as they can be without being fraud. There's a whole industry of 409a valuations that is used to legally say "we're selling preferred stock to investors as a 50MM valuation, but the common stock which represents 80% of the company is only worth 2MM". Founders want strike prices to be low because options are free compensation to employees. The issue is the out-going employees thought that a stake in the business was literally worthless, which turned out not to be true. Very similar to the Blogger story actually.
  - deleted 6y ago
    [deleted]

by adamhp 6y ago

PragmaticPulp 6y ago

Frankly, the investors who set the initial valuation (presumably used to set the strike price of the employee options) and later the $0 valuation (rendering the options worthless) and then giving away the IP that they declared worthless (despite the company not fundamentally changing) deserve a lot of the scrutiny. If the company had simply been left to make their own choices like laying off the employees and buying out investors, this would have been a different story.

jonfromsf 6y ago
I mean strike prices are usually unrealistically LOW, as low as they can be without being fraud. There's a whole industry of 409a valuations that is used to legally say "we're selling preferred stock to investors as a 50MM valuation, but the common stock which represents 80% of the company is only worth 2MM". Founders want strike prices to be low because options are free compensation to employees. The issue is the out-going employees thought that a stake in the business was literally worthless, which turned out not to be true. Very similar to the Blogger story actually.
- deleted 6y ago
  [deleted]