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Mailchimp insiders react to employees getting no equity from Intuit sale
- 1vuio0pswjnm7 5y agoDoes anyone else think this price Intuit is paying is a bit high.
- tonyedgecombe 5y agoEspecially after all the key staff leave which has been the pattern in the all takeovers I've seen at first hand.
- stevehind 5y agoA problem with making declarative statements about the future is you may change your mind and then be criticised. A problem with accepting below market pay is you may later regret it. There’s a clear fix to both and I don’t see any villains here.
- xbar 5y agoWhat's the fix for the victims here?
- enjo 5y agoWho are the victims?
- chii 5y agoi assume they are labeling the employees that did not get a big payout as a victim because of the lack of equity in the compensation. But presumably, the employees are told that they won't get equity, and their cash compensation is high enough to make up for it.
- BoorishBears 5y agoIf you tell me you won't give me equity it's one thing. If you tell me not to worry my little noggin about it because we're never selling :) and then you turn around sell for $12B, I'm going to feel a little shafted... - But looks like they accounted for this with the 500m pool, so in this case they ended up "fixing" the problem. I think in the end this will just be a cautionary tale on the other side of the "equity is worth TP" stories. I've always felt equity is a lottery ticket, but a lottery ticket isn't completely worthless... ps: It is a little funny watching all the people rush to defend this, like Mailchimp's founders obviously saw the issue here and negotiated that pool into the deal, but random HNs are so quick to defend it with "that's business folks!" like human emotion is something to throw in the garbage when talking about $$$. Mailchimp wouldn't have worked out with that mentality, it shows reading their story.
- bryanrasmussen 5y ago>If you tell me not to worry my little noggin about it because we're never selling :) and then you turn around sell for $12B, I'm going to feel a little shafted... The thing I don't understand - why would someone 'never selling' influence someone else to work for less than market rate? OK maybe I can think of some reason for a company producing something that saves peoples lives that you're afraid a big company wants to buy to shut down and push their inferior product but this ain't that scenario - so why?!?
- chii 5y ago> The thing I don't understand - why would someone 'never selling' influence someone else to work for less than market rate? sour-grapes. They see the equity payout, and imagined that they'd get a piece of it had they been compensated with equity. What they don't see is the loss if the company went bust - like most startups do - because hindsight is 20/20 so realistically, it makes little difference if a company paid in equity or cash - as long as you calculate the discount for the equity compensation appropriately.
- 5y ago
- ISL 5y agoI assume GP's fix is, "Don't accept below-market pay."
- pempem 5y agoI would go further and say "don't believe that your below market-pay is due to true commitment to a mission. more than likely your leadership isn't taking that same below-market approach for themselves." I'm not sure why, in most comments not just this one, the idea that you need to be cynical and not trust someone's stated good intentions isn't included.
- yunohn 5y agoMost humans prefer to exhibit trust towards other’s stated intentions. Cynicism is perfectly valid, but not a solution to the breaking of trust. The idea of a world where I must be cynical about everything and trust nothing, is dystopian. And quite simply, would fail incredibly quickly.
- pempem 5y agoOh hm.. I have a pretty different view of the world we currently live in. That pizza? Not actually 10.99. That 120,000 paycheck, not actually 120,000. The list goes on.
- goodpoint 5y agoIt's not a good solution. Cynicism hurts.
- deleted 5y ago[deleted]
- Nition 5y agoOwners pay a small percentage of the sale to the employees as a gesture of goodwill.
- yunohn 5y ago> you may change your mind and then be criticised Yes, that’s exactly what is happening here - and the criticism is from the employees who were lied to. > accepting below market pay is you may later regret it While they might’ve been paid market value, it is still quite disingenuous to deny equity and preach an independent vision. And then using the work done by employees to sellout for a massive payday.
- curiousgal 5y agoToday I learned that billionaires can be disingenuous lol Backstabbing and lying are the cornerstone of the startup system. People shouldn't be shocked when there's money on the line. Sad but true.
- yunohn 5y ago> People shouldn't be shocked when there's money on the line. Well, I guess that’s that then. We might as well get rid of human ethics and morals, trust based systems, and justice. Apparently, capitalism and the love of money is all we need!
- dcow 5y agoWelcome to 21st century globalism. When you build an entire society around fundamental economic power, what do you think you'll get? Not that?
- yunohn 5y agoWe can always ask/demand more of others. And in cases of ethical or moral uncertainty, we can introduce rules/laws, as society has done for millennia. The answer is not always to give up and support unethical behavior.
- vishnugupta 5y ago> We might as well get rid of human ethics and morals, trust based systems, and justice. In my experience these values are invoked when sums involved are not life altering. As the saying goes if you owe $5000 to a bank then the bank owns you but if you owe $500MM then you own the bank.
- dcow 5y agoDid anyone even accept below market pay in this case? The comp packages included profit sharing…
- mrgordon 5y agoSounds like they were talked into profit sharing instead of equity and now the profit sharing won’t apply at Intuit so they likely got almost nothing from it
- kyleee 5y agoEveryone has a price, old saying but it's basically true especially for life changing, generational wealth level money and all they had to do is sign on the dotted lines
- esyir 5y ago5-100 million is life changing generational wealth money. 12 billion is "ascend to the highest rungs of of wealth" level money. 12 billion puts you into the top 3000 list, looking at wikipedia's billionaire count.
- joncampbelldev 5y agoI believe they're getting $5bn each. Though of course your point still stands.
- mywittyname 5y agoYes, the aren't walking away with $∞, more like $∞/2!
- DisjointedHunt 5y agoCircumstances changed. They promised to never sell based on their perception of how circumstances would evolve even in the most ambitious scenario at the time, I’d imagine.
- quantified 5y agoNaive employees. Companies will break their promises eventually. C’mon, Google no longer promises not to do evil.
- onion2k 5y agoNot true. https://abc.xyz/investor/other/google-code-of-conduct/ https://abc.xyz/investor/other/google-code-of-conduct/ The last line is "And remember… don’t be evil, and if you see something that you think isn’t right – speak up!" The stories about Google removing the line were wrong. They just moved it from the start to the end of the document.
- h_anna_h 5y ago> and if you see something that you think isn’t right – speak up! ...and get fired
- john_yaya 5y agoThanks for this. Like so many people, I’ve long believed the myth that they removed it - though I can hardly be blamed, since A-list tech media have reported it as true.
- anothernewdude 5y agoSure. But they'd be more honest removing it.
- 10729287 5y agoThey're just asking their employee to not be evil there, not saying they won't as a company. You'be been (evil) tricked.
- 5y ago
- Aloha 5y agoThis appears to be a thread with a better explanation of their story. https://twitter.com/michaelmartocci/status/1437998201659920389?s=21 https://twitter.com/michaelmartocci/status/14379982016599203...
- Semaphor 5y agohttps://threadreaderapp.com/thread/1437998201659920389.html https://threadreaderapp.com/thread/1437998201659920389.html
- curiousgal 5y agoI can't for the life of me take anything posted as a Twitter thread seriously. It is just so stupid having to write/read something in so many little chunks.
- bryceacc 5y agoand there are entire sites dedicated to unraveling a twitter "thread" so it's actually readable. so backwards
- caslon 5y agoPlease don't complain about website formatting, back-button breakage, and similar annoyances. They're too common to be interesting. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- sergiomattei 5y agoYawn. Why is this news? People and circumstances change.
- xcambar 5y agoThis resonates interestingly with the recent post about Mullvad, yesterday on HN: https://news.ycombinator.com/item?id=28551960 https://news.ycombinator.com/item?id=28551960
- extr 5y agoI don't really understand why it's framed as withholding equity. It just wasn't offered, totally fair choice by the founders. If you didn't like it, why work there?
- echelon 5y agoIt's in Atlanta. There wasn't much else at the time, unless you counted Pindrop and AirWatch. Nowadays there are plenty of alternatives in Atlanta and no excuse for subpar comp. There are giant regional Microsoft [1], Google [2], and Facebook [3] offices, and a ton of good startups that offer equity at ATDC [4] and beyond. After it was obvious Mailchimp wasn't the best place to work, I tried to get my Atlanta mailchimp friends to join the then-pre-IPO unicorn I worked at. My equity is now worth eight figures (well, high seven, but I sold some along the way). I worked with someone even luckier who wound up as high C-suite of Greenlight, pre-unicorn status. Again, by not drinking the kool aid and taking charge of their career. Mailchimp underpaid these folks. And all for a shitty PHP stack that spams people. It's a job that's one notch above working at Home Depot or The Weather Channel. Unless you're really happy with what you do (and even if you are), shop around. You owe it to yourself. Microsoft is literally a mile away and will pay so much more. Mailchimp is going to be scraping the bottom of the barrel for talent after these offices come online. There are $300-400k jobs in the city if you look. A good lesson for the Atlanta tech scene. [1] https://www.fox5atlanta.com/news/microsoft-announces-major-expansion-in-metro-atlanta https://www.fox5atlanta.com/news/microsoft-announces-major-e... [2] https://www.bizjournals.com/atlanta/news/2021/03/23/google-confirms-atlanta-expansion.html https://www.bizjournals.com/atlanta/news/2021/03/23/google-c... [3] https://atlanta.curbed.com/2020/3/19/21186363/facebook-atlanta-atlantic-station-t3-west-midtown https://atlanta.curbed.com/2020/3/19/21186363/facebook-atlan... [4] https://atdc.org/ https://atdc.org/
- LurkingPenguin 5y agoIf you offered your friends an opportunity at your company, which based on your comment ostensibly would have paid them more and granted them equity, why did they stay at Mailchimp?
- john_yaya 5y agoAt least they were honest about withholding equity. Lots of startups do effectively the same thing by granting RSUs that become worthless via an assortment of underhanded mechanisms.
- rado 5y agoStrange. They were free to move to a company that offers equity, but stayed?
- Proven 5y agoHe said, she said... Customers and employees who wanted to rely on those "statements of direction" should have asked for a hard contractual commitment...
- rmason 5y agoIt's the culture. In a lot of places equity isn't understood or valued. Pretty common outside the Valley and maybe New York and Boston. In Michigan startups the top five people might have equity and that's it. The exception is Ann Arbor where they understand and value equity. It's also where they have the strongest startup culture. But things are starting to change in Detroit.
- pm90 5y agoI feel like equity is a very important reason for the success of SV companies. Equity holding employees have an intrinsic motivation to work towards the success of their workplace. When equity granting companies succeed they make a lot of people wealthy (rather than just the founders/investors) creating a new class of investors.
- hellisothers 5y agoHonestly it could be worse, I worked at a company that gave equity and years later it came out that the founders never intended to sell or take VC money. In that case employees “took below market salaries” thinking the stock is worth something but in reality it’s worthless. At least in this Mailchimp situation if you’re not getting equity I assume you’re happy with your cash comp, I’d you’re not, that doesn’t make sense.
- nextlevelwizard 5y agoYeah, if you don't intend on selling then you should say so and not offer equity so the employees can make a better decision. Things may change and you might sell after all, but that is not "withholding" anything, that is just things changing. I can only imagine this story was spun by employee who saw the founders selling and getting bunch of money and now think they should have reaped some of the benefits. Money and greed make people stupid.
- sangnoir 5y ago> Yeah, if you don't intend on selling then you should say so and not offer equity so the employees can make a better decision What's wrong with offering equity and staying private? I don't see any deception there - say if Valve gave equity to it's employees, that'd be perfectly fine.
- spoonjim 5y agoBecause the founders likely won't issue any dividend distributions, they'll just likely borrow against their holdings for decades or even until the end of their lives.
- deleted 5y ago[deleted]
- nextlevelwizard 5y agoIt would be perfectly fine, but if you join a company A because they offered equity instead of company B which offered more money BECAUSE you wanted the equity to materialize, but the founders never intended to sell, then you are taking objectively worse offer because you were under the impression equity meant something. Of course any company can give out equity to their employees, but if it never turns into money then who cares?
- bigiain 5y agoHands up everybody here who wouldn't go back on their word for $6 billion? You lot are all liars. If you don't think your best friend, your parents, your wife/husband, or your children - would not sell you out for $6billion, I reckon you're deluding yourself.
- rightbyte 5y agoSo it was 0 USD or 6 billion USD? They are just shifting their assets from the company to dollars.
- tonyedgecombe 5y agoPerhaps you are projecting your own values onto everybody else?
- joncampbelldev 5y agoNOT OP but there's very little I would not sell or change my mind for $5bn. That much money just to go back on a promise to not sell would be a very easy decision (bear in mind that no material harm is done to the employees, no equity was promised, no equity was given, they never had a chance to share in the sale regardless of the founders' promise)
- Seattle3503 5y agoBusinesses can't make promises, they can only make contracts.
- thomasahle 5y agoWhat do you think would be good wording for a "no sales" contract?
- rbro112 5y agoI worked at MailChimp for a few years. I most recently worked at a company that went through an IPO that I had equity in. When deciding to join my recent company, equity was the largest factor in my move. MC’s benefits are great and at the time were top-tier in Atlanta. They are cash/401k heavy and offer great profit sharing incentives. They also make it abundantly clear that they don’t offer equity and when I negotiated my non-MC offer that I ended up accepting, they were clear that they could not match my equity. They even acknowledged that if I was willing to take a risk with the equity it would likely be the advantageous move to make. Nonetheless, during my time at MC Ben/Dan repeatedly boasted about turning down offers to sell and repeated they were never intending to go that (or the publicly traded) route. This ultimately factored into my decision to leave, as it never appeared I would have a personal stake in the company. I hope other employees interpreted this in a similar manner and I do believe everyone had abundant opportunities to do so. In the end and in hindsight, I’m happy with my decision to leave and it did pay out. Nonetheless, I do still believe MC is a great company and despite the founders somewhat selling an incorrect vision, are still acting in good faith. I don’t believe they “withheld equity” as they made it explicitly clear it was never offered, or was ever going to be, but I do see how the boasting of never selling out could be interpreted poorly now in hindsight.
- dcow 5y agoThis is perhaps simply a good reminder that everyone has a price and nothing is set in stone. If you’re in a position of leadership, be humble and real. If you’re an employee, don’t be naive. The market has the last word.
- amznbyebyebye 5y agoThe capitalism machine doesn’t care about your humility or integrity even- only that you obey the letter of the law. I learned that the hard way, work isn’t a religion with morals, it’s work and there are rules. Your second point however, “don’t be naive” agree 100%
- dcow 5y ago
- mkl95 5y agoEquity is an optional, rare thing to be offered. And you should never trust a founder's / C-level's promises.
- thiscatis 5y agoSo funny seeing all these LinkedIn posts show up by pseudo entrepreneurs and startup gurus copy pasting the same shit about how awesome they did by not giving equity. Only to see the balloon popped with the other side info on HN a couple of days later.
- metadata 5y agoThe problem is not that the MC founders never intended to sell, then changed their mind after they reached an interesting sum. The problem is just that they were so certain they will never sell and talked about it so many times, that (some of) their employees now feel betrayed. I am certain they never wanted to screw anyone and they identified with their "bootstrapping, never sell" culture. I am guilty of the raising bootstrapping to pedestal for many years and understand their values. Learning from this, it may be good not to a) identify with current beliefs as we might change priorities and learn new things in the future, and b) talk in length about our current beliefs. Perhaps "we don't think we will ever sell and have optimized our business for that, but who knows what future will bring" might have worked better.
- itzprime 5y agoThe majority of companies don't give equity in the world. And those who do only give it to certain employees. As they don't violate RSU or stock compensation plans they didn't withheld equities. If I created a successful company, I would also say that I would never sell. However $12B is multi-generational wealth and with it you can do anything you want. So that sum would also pursuade me.
- fastball 5y ago$12B is all your descendants forever if you manage it well. I mean treating it as a lump sum you only ever pull from without any appreciation in value and you can bankroll your descendants to the tune of $10,000,000 per year for 1200 years.
- deleted 5y ago[deleted]
- smt88 5y agoWell, let's compare apples and apples. The majority of US-based software companies give equity, especially in earlier stages.
- markmark 5y agoAnd mailchimp's employees could have chosen to work for any one of those if equity was important to them. No one was tricked here.
- smt88 5y agoI agree, but it's notable that MailChimp was unusual in this regard. It's also easier to convince people they'd rather have cash than equity if you tell them the equity will never be liquid.
- MAGZine 5y ago"We're not giving you equity; we're never going to sell." If the explanation the company gives you for not giving equity is that they're never going to sell, but they end up selling, how is that not being tricked? Seems like a pretty cut and dry case of bait and switch. Why even tell people you're never going to sell? How about, "equity is not a part of the compensation package we offer," with no false justification? Acquisitions suck. Depending on the $ amounts/growth trajectories/timelines/etc I'd potentially take less TC up front to avoid one.
- acjohnson55 5y agoMy thing is that the founders changed their mind about being acquired, so they could have changed their mind about employee equity at the same time. It's their right to do it how they did, but I also think the blowback is fair.
- endofreach 5y agoI wouldn‘t give up on equity if i didn‘t plan to sell. Because that could lead to others wanting to sell their equity and me losing control. I mean when you start a newsletter company, do you really think you would sell it for 12B? Don‘t forget it means they didn‘t try to sell at: - 1 million USD - 10 million USD - 100 million USD - 1.000 million USD - 5.000 million USD - 10.000 million USD How many non-founder equity holders who are „just working a job“ would not have tried to sell their equity at an earlier evaluation? Assuming they really did not want to sell, honestly, 12B for a newsletter tool seems worth changing your mind.
- mcintyre1994 5y agoAn interesting angle I saw on this is that usually a $12b exit in a city mints a bunch of new multimillionaires, many of them decide to stay in the area and some of them become angel investors in the area and boost the local startup environment. So it might suck for other entrepreneurs in the area that there aren’t a bunch of new angel investors now - just a few new billionaires. On this story though, as long as it’s clear to both parties what the deal is, I think it’s fine to either offer or not offer equity. And a promise not to sell is obviously meaningless unless the corporate structure somehow enforces it.
- Animats 5y agoThey're spammers, after all. What would you expect from a spammer. (Spam definition, per Spamhaus: "All email sent unsolicited and in bulk is Spam.")
- vmception 5y agoThe most interesting thing about this being that people care. Very little discussion about how Mailchimp services will perform under Intuit, here. So the lesson is don't make zero equity and zero exits your personality trait, but probably do the same things either way.
- vishnugupta 5y agoIn a business world “never” should be interpreted as “next 3 years”. Even if the one making a claim/promise genuinely mean literally never, the circumstances change. And when they do it is naive to expect them to not react. Don’t be dogmatic about attaching literal meaning to what’s said.
- approxim8ion 5y agoWhy shift the onus onto the person interpreting it instead of letting people be accountable for the things they say?
- jfrunyon 5y agoOr perhaps it's naive (and misleading and fraudulent) for business leaders to say "never" when they know it's not true and/or that they can't guarantee it. If you say something, you should mean it, and you should be held to it. Please stop making excuses for liars.
- IkmoIkmo 5y agoWhether they promised to sell, or not sell, either way, they never promised equity. Not promising equity if you never sell can be a sensible decision, because otherwise you create expectations of a cash-out that never comes. Not promising equity if you do sell can be a sensible decision, because you keep more of the money to yourself. As long as you're transparant about not selling, employees can evaluate your remaining value proposition (salary, profit-sharing, perks) and decide whether it's worth it. All 12k employees evaluated that value proposition and said it's worth it. At some point the founders changed their mind. And that's okay, people change their minds. Unless they lied about it from the beginning and tricked people into a company vision they knew was bs, but the evidence doesn't clearly point to that.
- mrgordon 5y ago> Not promising equity if you do sell can be a sensible decision, because you keep more of the money to yourself. As long as you're transparant about not selling Yes it’s always sensible to take more money for yourself lol. But they weren’t transparent about not selling (they said they wouldn’t and then they did so they lied). Hence why the employees feel screwed
- smiths1999 5y agoOr they changed their mind (which they are entitled to do).
- qeternity 5y agoWhy do employees feel screwed? They didn't have equity. Why does it matter?
- Aeolun 5y agoHave you ever been part of a company that was acquired (by a hideous corporate behemoth no less)? It’s fucking horrible. Suddenly you find that requesting a new pen is a 3 day process and the previously free coffee in the cantina now costs 20 cents.
- kolla 5y agoI'd break any promise I'd ever made for that ammount of cash.
- wonnage 5y ago> "Knowing that this is literally our co-founders' (Ben and Dan) money, and that they share it so generously, is remarkable." We've been trying to placate the working class for decades now by convincing they should feel ownership in their work and careers. And now you go and say the quiet part out loud that it's actually all a lie and labor is just enriching capital. 10% of the profits may be generously trickled back down to you by your gilded overlords. It would be refreshingly honest if these founders could just come out and be proud of the fact that they managed to keep the company entirely out of employee hands, and are each probably ~$2b richer because of it. Have some dignity.
- martin1975 5y agoany way to get past the BusinessInsider.com paywall?
- napolux 5y agoWhen I was in eBay some years ago I clearly remember the CEO saying during a company all hands: "we're one company, we'll never separate from PayPal". After 15 days the split was announced. :D So don't believe any single word from any CEO/Founder.
- toyg 5y agoHappened to me with the Hyperion CEO - "we're not selling, we are a billion-dollar company!", and the next month Oracle announced the acquisition. Not that I was surprised. When it comes to strategies and mission, I just don't believe anyone in any position of authority in a company, from the CEO all the way to line managers. The only strategy is to make money, and if anyone at any time thinks they'll make more money doing the opposite of what they promised, they'll flip in a minute.
- hef19898 5y agoWhy would anyone believe Handsome Jack to begin with?
- tonyedgecombe 5y agoI remember hearing something similar from one of the e-commerce companies when Digital River was hoovering them all up. They did hold out for longer than 15 days though.
- CodeWriter23 5y agoJust witnessing firsthand what Intuit has done to TradeGecko in transforming it into “QuickBooks Commerce”. Really great API for interacting with, like, everything, deprecated and EOL’d in just under a year from now. Say your goodbyes to Mailchimp. They’ve probably got about a year before the Intuit business folks complete the assimilation. Turns out though, I end up being a NetSuite Expert due to their move.
- jl6 5y agoPut your hand up if you would lie for $12B. Now you know how the world works.
- approxim8ion 5y agoNote to reader: when you see the "circumstances change" comments here, read as "I too would love nothing more than to fuck over my employees if it means more money for me, and I'd greatly appreciate if this behavior became more acceptable."
- U1F984 5y agohttps://archive.is/U7KvJ https://archive.is/U7KvJ
- xwdv 5y agoI don’t understand why people don’t see the outrage here for what it is: pure greed. If you aren’t offered equity, the company’s decision on whether to sell or remain private is completely irrelevant to you. Whatever happens, you’re not going to benefit anyway. Why even give a shit? Do your job and collect your paycheck, don’t catch feelings thinking you’re part owner. You knew the deal going in, now you want to alter it after the fact for your own benefit? Just another case of people seeing a pile of money and wanting to grab a piece. If you wanted equity and chose to work there anyway hoping that someday the founders might throw you a bone in case they changed their minds and decided to sell, you’re a fool.
- basisword 5y ago1. Nobody can promise to never sell. If you believe that you’re a fool. They held out longer than most. 2. Nobody is entitled to equity. You chose to take the job knowing you weren’t getting any. Complaining about it now is idiotic. I see similar stories on HN from time to time about employees not getting equity or anything out of an acquisition. I get the feeling it’s the “we’re a team/family” vibe that causes this. People need to wake up and remember they’re simply being paid to do a job for somebody else. You’re not all best friends. If you want to be rich, take the risk and start your own company.
- windowsworkstoo 5y agobang on - I assume these people collected a monthly pay packet? If so, what is the best problem? Such naive entitlement.
- rocqua 5y agoBest I can figure out is that people feel like they had a moral right to sharing in the founders windfall / feel harmed by the founders having a windfall, and feel they were promised this harm would not come to them. I understand it feels shitty, but I don't think they have a valid complaint. I certainly don't think we should make a universal law "all companies should offer equity compensation".
- OJFord 5y agoIn most sectors it wouldn't even cross (low-level) employees' minds!
- Aeolun 5y agoI am willing to take less money and comp to work for a person and mission I consider to be idealistic. If this person then turns their back on that for a huge immediate payout, I can sort of understand it, but it still pisses me off.
- someguydave 5y agospamming email hardly seems like a purely altruistic mission
- murbard2 5y agoHeadline: "Mailchimp founders promised to never sell" Content: "It was part of the company lore that they would never sell" Maybe such promises were made, but the article is pretty scant on evidence.
- sam0x17 5y agoI think it's fairly obvious that using "we will never sell" as a justification for not giving other people equity over the years was just that -- a justification for not giving other people equity over the years. It seems that paid off.
- junon 5y agoI don't see how more employees aren't absolutely enraged. The announcement tweet[0] is filled with congratulations and only a handful of "why intuit?" tweets. Nobody mentioning lying to employees. I'd be furious, personally. E: It appears employees are getting stock and/or payouts after the deal closes. This article is either outdated or misinformed, or both. [1] [0] https://twitter.com/benchestnut/status/1437514331059630089 https://twitter.com/benchestnut/status/1437514331059630089 [1] https://twitter.com/benchestnut/status/1437869751091535875 https://twitter.com/benchestnut/status/1437869751091535875
- imgabe 5y agoA lot of people who say they'll never do something would probably change their mind for $12 billion.
- KaiserPro 5y agoThe one thing that is missing from this discussion is the actual value of any stock that the employee might have received. The headline figure of $12B, of which maybe $1B is split between 1200 employees is almost always a fantasy. Having been bought out by a large company, the reality is far less rosy. If you're buying a company for both its assets, and its employees, giving all the employees "fuck you" money is a very bad play. they are going to leave and do things other than work for the new company. which means on day one you have a huge brain drain, culture shift and a hiring headache. Therefore you need golden handcuffs. Sometimes its a year, most of the time its a lot longer. Then we have the "headline" figures. Most of them are bollocks. Ctrl-labs supposedly was sold for $500m. It wasn't, it was significantly less than that. most peoples assumptions of what a stock option is valued at during a buyout it as much as 10x out from the actual value you'll receive. This is before we factor in the whole debt swap/priority stakes/other VC semi fraudulent share systems. unless its an IPO, and you are given actual shares in your hands, most of the money that's talked about during buyouts is illusion.
- nemo44x 5y agoMany employees have no idea how a cap table works or even what it is. They don’t understand that a buyout for $X dollars doesn’t mean that all the shares are divided equally. VC’s have a good deal with liquidation preferences. Sometimes an acquisition works out great but this generally when a company was going to go public anyways. We hear about all the IPO’s that made 200 overnight millionaires. But we don’t hear about the vast majority that either fail, have a poor exit, or just sort flag in the wind.
- defnmacro 5y ago> We hear about all the IPO’s that made 200 overnight millionaires. But we don’t hear about the vast majority that either fail, have a poor exit, or just sort flag in the wind. To play devils advocate, most people who intentionally optimize their career focusing on equity rather than TC know this fairly well and have had their fair share of duds. You can also make the argument that overall the EV of optimizing your career for equity is probably lower than just getting a high paying FAANG job. However, with all that being said, the only way to be the "overnight millionaire" is to play the game. Also, there really isn't any overnight millionaires, those people probably worked for years for sub-par comp compared to alternatives and took a large risk whether knowingly or not to get that payout which may or may not have existed. There really is no free-lunch if your employee #5 at Uber you made tens of millions of dollars, however you took the risk of being employee #5 at Uber. Look at Snapchat though they paid huge amounts of equity when they were trading in the 10's even after they IPO'd if you were employee #10002 and joined Snap at 100k-250k in equity that netted you anywhere between 600k-1.5m if you held the shares, that's not including cash comp. However, you took the risk of joining a tech company that at the time nobody really wanted to join and may very well have closed the doors. That being said there very much is an alternative risk of going the safe route of just optimizing total TC. That risk is generally that path is well defined, the salary bands are well published, and overall despite whatever amount of effort you put in that will be around the amount you make. You'll be flogged into a corporate grind if you really want to make more either by job hopping or trying to get promoted. The risk with the defined path is well, its just that linear and well defined, not saying it's a great path and maybe even a better one overall but it means you'll be working for Facebook when the next company that is going to disrupt Facebook is potentially out there today. Equity stakes for employees means the tails on the right side of the distribution are rich. Assuming you get a cash comp that makes you happy that equity stake my very well be the thing that puts you in the 1-10m+ range if your extremely lucky. If not even if its mildly successful a 50-500k payout with a decent salary of say 150k a year over 5 years netted you 160-250k comp a year while putting you in the run to make potentially millions. If you work for a "startup" that is a decent place to work and respects WLB etc then taking those "risks" over your career might make a-lot of sense. You'll probably learn way more too, have more autonomy, and frankly they can just be alot of fun.
- lionkor 5y agoSay you work at a small company, 15-20 employees. Your boos tells you he will never sell, but you and your 14-19 colleaques want that on paper. Is this possible? How would you go about this? I'm currently in a situation where I'd love to know if "surprise sale" can be avoided.
- movedx 5y ago"I'm not selling, I'm just moving ownership into this here trust." <20 minutes later> "I'm not selling the company, the trust is. I said *I* would never sell, but the other trustees are selling it, not me. I can't prevent this" <20 minutes later> "OK everyone listen, good luck, I've got my $5B so yeah, lol? Laters!"
- zild3d 5y ago> How would you go about this? Realize that "they would never sell" means they don't plan to sell, but there is a number that would change that decision. So ask what that number is. 100M? 1B? 10B?
- HatchedLake721 5y agoI don't think it's possible, but why does it matter? You either join with lower salary + equity, or higher salary and no equity. (and equity is always a lottery ticket) You shouldn't trust anyone saying "they would never", especially in business. Situations change, people change their mind, opportunities change, lives change, regulations change and so on.
- rocqua 5y agoI see how it hurts to be lied to. I don't see how "we weren't given equity but now they sold" is an issue. It doesn't change anything about your past payout. Yes, you would have been better of had you gotten equity, but you probably would have given up salary for that. Apparently you found the "no equity" deal acceptable. Why does being sold make the old compensation scheme unfair all of a sudden. Its not like employees have a right to equity. It is somewhat standard, but here it was clear enough ahead of time that there would be no equity. The given reason for why they do not offer equity turned out to be wrong. But why does the reason you did not get equity matters? Would a different reason for not giving equity have changed whether you had accepted the job?
- fnimick 5y agoBut the "no equity" deal was valued as acceptable because the equity was positioned as worthless in the "never sell" world. If employees had known there would be a sale and they'd never see a cent from it, they may have valued the offer differently.
- ihusasmiiu 5y agoI'm not sure what's the news here.
- gjvc 5y agoFirst rule of business. Never trust anybody.
- alistairSH 5y ago“Withheld”? Lol, no. That sounds nefarious. It wasn’t. The founders wanted to retain ownership. That’s their right. It appears employees were paid fair market wages for work. The inverse would actually be evil. Imagine being granted equity and a below market wage in a company that the founder never sold.
- smokey_circles 5y agoI don't understand some of the points here. You as an employee are not entitled to equity at all. That's incentive, not required. And equity isn't a great offer either. How many startups REGULARLY fail before they even get out the door? For everyone talking about how much money they made off of equity options, we can find plenty more that lost out on a chunk of their monthly salary. I'm not saying don't take equity, but let's be honest: Identifying if a company has the potential for their equity share to outweigh the lost salary requires skills and knowledge most of us don't have.
- MAGZine 5y agoI think in this case its pretty clear that equity would have been a great offer.
- specialist 5y agoWhat about profit sharing? Fairness? When execs get a visit from the gold faerie, it's just good manners to spread around some of the manna.
- cirkut 5y agoRemember interview at Swissborg... Equity sucks, best are tokens... Well easy to say when you have majority of voting rights...
- drumhead 5y ago"Paris is well worth a mass" as Henry IV of France supposedly said after gaining the crown. People can drop their deepest beliefs sometimes when the prize is big enough.
- HumblyTossed 5y agoNever going to sell. Then sell to Intuit! Feel for those employees.
- antattack 5y agoI am old enough to know how cool it was to be a millionaire. Where is all that money (billions) coming from? Who had it before, governments?
- rexreed 5y agoIn this case, public markets. Public companies are flush with cash and finding few places to park it to gain a positive return. Acquisitions, stock buy-backs, and similar are ways to juice overall return. Intuit gains a recurring revenue stream and access to hundreds of thousands of small businesses, which is their bread and butter.
- anonuser123456 5y agoScale. There are 7 billion people on the planet. Get 1/100 of them to pay you 10$/month and you have 7 billion dollars / year.
- NibsNiven 5y agoBanks can create money by typing numbers into a computer. The Fed has recently created trillions.
- ykevinator3 5y agoGood for them. I think it was a super overvalued buy because there isn't much defensible IP but smart to get out when you can, and moral analysis of legal business is futile and meaningless. You can aacrive meaning for your own self esteem but money doesn't care.
- chrisgd 5y agoIt is a lot easier to say you will never sell when you aren't looking at a multi-billion dollar offer
- locallost 5y agoSo the lesson is: never believe in promises where you have no control over those that do the promising. I do wonder. MailChimp employees are probably respected, and could find something else quick. Why don't they threaten to walk out? Without employees, what is the company actually?
- jdorfman 5y agoAs the article says, equity rarely pays off, that has been my experience. If you are joining a company in hopes you'll be a millionaire once the company exits then you're setting unrealistic expectations and will be disappointed.
- mywittyname 5y agoMost late-entry employees get pretty modest equity grants IMHO. Unless you're a serious domain expert or a Carmack-level developer, you're probably looking at a few thousand shares a year, which isn't going to be million territory in a company for decades. Think about how long it would take to turn 1000 shares in Amazon into a million.
- tinyhouse 5y agoI didn't read the article yet. It's insane to me that founders who didn't take any investment and sell their company for $12B wouldn't allocate a few billions to their 1200 employees, regardless if those employees had equity or not. If that happens then f** these bastards. Nothing I agree more than working for people with shitty morales, no integrity or compassion to others. Don't work for such people. Regardless if they give you equity or not.
- scumcity 5y agoThe Fed strikes back. The most disturbing thing about this article is that Mailchimp is worth 12b and that Intuit had 12b to spend on it. Couldn't have happened 2 years ago, regardless of demand/supply, product market fit, business strategy, etc.
- kodah 5y agoWhen I was in the south it was very common to only get paid salary and insurance. The one company that did give me equity gave me $10k. There's nothing wrong with what the founders did. That said, I came from Texas. When we started seeing a flood of people from high income regions moving to Texas and driving up home (and other area costs) I realized high inflation states had beat the system. People that lived decently there were royalty when they moved to Texas. I eventually moved to California, and my RSU plan is what made my savings go from $0 to on track within 3 years. If I can say anything to founders in the Midwest and South: pay RSUs. It's the difference between retirement and spending your entire life working.
- entropicgravity 5y agoThe long con strikes again.
- blunte 5y agoThis is just another example of why working (and getting educated) to be an employee is usually a poor decision compared to putting your energy into becoming the employer. Nobody explained this to me, and I spent over two decades running the employee rat race. Most races take your time and energy, leaving you with far less reward than they promised (no matter how much you excel). Young ones, let this be a lesson. Struggle and be poor for a decade if necessary, but build your own business. After 15-20 years you will probably be way ahead of your same age employee people.
- bb123 5y agoIs this really good advice? Most businesses fail.
- wing-_-nuts 5y agoIt's not. The expected value of starting a business is well below that of being an employee at a large company
- annoyingnoob 5y agoI've worked at a number of startups. I've had equity work out for me exactly once.
- cascom 5y agoI’m pretty sure for every mail chimp employee that wishes they had pushed for stock compensation, that are scores of other startup employees that wish they had not taken stock in lieu of cash in now worthless start-ups. People just need to own the choices they make.
- stadium 5y agoAre any company charters setup to let employees participate in funding raises or acquisitions at the same terms as the 3rd parties? And what would that do to the marketability of the company to those 3rd parties? Sort of a poison pill that benefits employees during an exit.
- Mikeb85 5y ago> for current employees the bonuses account for only about 2.5% of the total deal's value and work out to just $83,000 per employee per year. "Just" $83k per year in bonuses. Sounds like a pretty good deal to me, considering other posters who said MC paid pretty well and had good benefits. Tons of startups use equity as an excuse to under-pay and most go under, leaving the employees with useless stock and having earned less in their prime years than they could have.
- itsdrewmiller 5y agoI don't understand the math here either - 2.5% of 12 billion = 300 million, which would be 250k per person. And that's ignoring the 200mm in RSUs being issued to employees as well.
- lostcolony 5y agoThis is why I largely stopped looking at company mission and values and such to determine where I want to work (beyond just immediately saying "nope" to even considering a few). I look at comp, culture, and assume my stay will be temporary since the former of those is likely to not change at the rate the market does, and the latter of those is likely to change in ways I object to given time. The only reason to join a company based on mission or whathaveyou is if it's a non-profit. Maybe, -maybe- if it has done things that hurt the bottom line, to the betterment of employees, that have no precedent in industry (i.e., Gravity Payments), but even then, you benefit from that, so it still counts as comp to my eyes.
- __lazybyte 5y agoSeems there is a price for everything.
- marsdepinski 5y agoAll things people and companies tell you have an implicit "at this time" attached to them.
- backoncemore 5y agoMailchimp is very clear about not offering equity. I turned down continuing to interview when I found out.
- WalterBright 5y ago> But the many employees who have left Mailchimp in recent years are excluded When one voluntarily terminates a relationship with a company, and agrees to a settlement as part of that, that's it.
- bfrog 5y agoLack of equity at this point is a red flag to me. Points at either internal greed or external greed (investors) deciding hiring talent and offering skin the game isn’t needed. Talent goes where the money is. I learned the hard way, don’t be me.
- hamburgerwah 5y agoI'm am at a loss that otherwise smart people didn't see this coming. The employer/employee relationship is ALWAYS adversarial. An employer is never ever ever going to be watching out for your interests as an employee and always going to be seeking the maximum means of exploiting you, act accordingly. This isn't a new thing. It's not much consolation but mailchimp folks still made out way better than wework folks.
- mpwhite999 5y agoTell me again. Why have any normally equity- ellible staff NOT resigned today? Act like sheep and you deserve to be treated as a herd. Proud of building a great company? You didn't. You built an organized crime venture.
- say_it_as_it_is 5y agoEveryone signed up for no equity and some are now upset that they're not getting a cut?
- refurb 5y agoThis sounds like one of those complaints where they complain about not getting equity but would also complain about getting equity if it turned out to be worth $0.
- xtat 5y agoThe original title on this was better imo
- RantyDave 5y agoI'm sorry, they're getting $83k per employee per year in bonuses? Sounds pretty fucking handy to me.