6 ms·

Who are the victims?

by enjo 5y ago

chii 5y ago
i 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 ago
  If 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.
      - BoorishBears 5y ago
        This is a very uncharitable view of how most people would feel in this situation. - Imagine a lottery/raffle/etc. where the state says "we're probably not going to be drawing the results for this, so instead of giving you a ticket with an expected value of $0.05 we'll give you a guaranteed $10 right now" Mathematically that's a very generous offer! But then the state turns around and runs the lottery after everyone takes them up on that offer with the understanding the ticket would be worth $0 if there's no draw. The state paid you more than the expected value of your ticket, by the math you got compensated more than a fair amount and the odds are you would have made a lot less than $10... but do you think most people will be upset? More upset than if they had just lost a normal drawing?
    - BoorishBears 5y ago
      Where was it implied that never selling made someone work for less than market rate... Do you not see how someone can feel mislead if told X will not happen and X thing happens? - The rebuttal everyone in this thread is parroting is a tautology. Saying "things change". Yes by the very act of existing over a period of time a company will indeed have changed even if it's just age. It's not a helpful response to how people feel, and again, you're always free to throw feelings in the trash in business... but at the very least have the courage to admit you're doing it. There's no reason to pretend you don't see why people don't like it (And again Mailchimp's founders seemed to have that courage, hence the fund)
      - 5y ago
  - esyir 5y ago
    I'm having a hard time seeing said employees as victims here. They knew they were getting pay and no equity. There was a "we don't intend to sell", but c'mon, 12B is a ludicrous amount, and I'd be amazingly surprised if they didn't sell for at that point. Now, if it ended here, I'd fully understand feeling stiffed and lied to. But mailchimp has about ~800 employees. a 500m pool is more than half a million per employee. That's a hell of a payout, considering the previously accepted stability and derisking.

Who are the victims?

by enjo 5y ago

Who are the victims?

chii 5y ago

i 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 ago
If 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.
    - BoorishBears 5y ago
      This is a very uncharitable view of how most people would feel in this situation. - Imagine a lottery/raffle/etc. where the state says "we're probably not going to be drawing the results for this, so instead of giving you a ticket with an expected value of $0.05 we'll give you a guaranteed $10 right now" Mathematically that's a very generous offer! But then the state turns around and runs the lottery after everyone takes them up on that offer with the understanding the ticket would be worth $0 if there's no draw. The state paid you more than the expected value of your ticket, by the math you got compensated more than a fair amount and the odds are you would have made a lot less than $10... but do you think most people will be upset? More upset than if they had just lost a normal drawing?
  - BoorishBears 5y ago
    Where was it implied that never selling made someone work for less than market rate... Do you not see how someone can feel mislead if told X will not happen and X thing happens? - The rebuttal everyone in this thread is parroting is a tautology. Saying "things change". Yes by the very act of existing over a period of time a company will indeed have changed even if it's just age. It's not a helpful response to how people feel, and again, you're always free to throw feelings in the trash in business... but at the very least have the courage to admit you're doing it. There's no reason to pretend you don't see why people don't like it (And again Mailchimp's founders seemed to have that courage, hence the fund)
    - 5y ago
- esyir 5y ago
  I'm having a hard time seeing said employees as victims here. They knew they were getting pay and no equity. There was a "we don't intend to sell", but c'mon, 12B is a ludicrous amount, and I'd be amazingly surprised if they didn't sell for at that point. Now, if it ended here, I'd fully understand feeling stiffed and lied to. But mailchimp has about ~800 employees. a 500m pool is more than half a million per employee. That's a hell of a payout, considering the previously accepted stability and derisking.