4 ms·

Maybe. Being paid out 100k for 45% of any future exit of the company forever doesn't seem unreasonable on the face of things, even if the company only has 52k i

Maybe. Being paid out 100k for 45% of any future exit of the company forever doesn't seem unreasonable on the face of things, even if the company only has 52k in the bank and has been operating at a loss for a long time. But that would depend on the specifics of what the company has in the pipeline. But if you think the company is likely to follow something like the following trajectory of net income then 100k for 45% doesn't seem all that unreasonable, even with time discounting. Year 0: -10k Year 1: 0k Year 2: 10k Year 3: 20k Year 4: 40k Year 5: 80k Year 6: 100k Year 7: 100k

fastball 5y ago
Why would we expect a company that has been steadily reversing that trend to follow that trend? Suddenly because a founder is leaving you expect them to start turning a profit again? That seems a little backwards.
- dwohnitmok 5y ago
  Has that been true? I don't know what the company's financials have looked like year over year. > Suddenly because a founder is leaving you expect them to start turning a profit again? No, it's more a question of whether you think the company will ever turn a profit. That's probably the point of contention over how much the shares are worth: do you think Elementary OS will ever financially support a team? If not then you probably lean closer towards a 0 dollar valuation (or in this event 26k). If you do then you probably lean closer to a 100k valuation.
  - fastball 5y ago
    Well the tweets said sales fell and haven't recovered since COVID, which has been going on for two years now. But regardless, the value of the shares are... whatever their value is now. It doesn't matter what they might be worth in 10 years if their current value is ~zero and a founder wants to divest them now.
    - dwohnitmok 5y ago
      > It doesn't matter what they might be worth in 10 years if their current value is ~zero and a founder wants to divest them now. But the current value of shares is intimately tied to what their expected future value is. Indeed in the absence of an acquisition or IPO this is the only way to determine the current value of shares. And if different people disagree on their expected future value, they will disagree on their current value.
  - yakak 5y ago
    From the looks of it they never turned a reliable profit to pay two developers. They received a one time anonymous donation in 2018[1], that led to the second developer and looks like they were averaging about 16K a year then. In general, I think what is wrong with this argument is that they are both in the wrong. They founded a company that should have been a 501c and now they are talking about its value as an asset based on the willingness of people to make donations to enable developers to work on a project. These kinds of cream on the top FOSS projects run as companies are largely relying on naive good will of people who want to fund the best project to adapt open source to them rather than the best portion of open source for them. [1]https://en.wikipedia.org/wiki/Elementary_OS https://en.wikipedia.org/wiki/Elementary_OS
- toyg 5y ago
  well, they'll basically lose half the costs immediately, since they'll stop paying the second developer's salary. If that's 16k and they lost 10k last year, this year they can be in the black if they don't dip further. This said, I reckon the real issue is that the guy wants 50/60k from the shares, so the lawyer went "we'll ask for 100k and negotiate"... but on the other side they probably think 26k was already a compromise, and aren't willing to budge further.
mdoms 5y ago
Yes, if we consider your completely imaginary numbers that have no basis in reality or even basic reasonableness then sure, it makes perfect sense.
- dwohnitmok 5y ago
  Those numbers are made up sure, but they're meant to demonstrate that a 26k valuation of 45% of your company after 10+ years in business means you effectively believe your company will never be able to support more than one employee (presumably the founder themselves), by contrasting with how modest even a 100k valuation means you think the future of the company will be. It's fine to believe Elementary OS will live on in perpetuity as a single person free lance project, but is a pretty stark contrast with where I think Elementary OS wants to go and means that one of the co-founders presumably should come out and say Elementary OS will never be a company, but rather a one-person free lance project. And I can easily understand how that would rub the other cofounder the wrong way ("Oh so you believe that Elementary OS will eventually be able to hire a team down the road but you're offering me a price that indicates the opposite, even after accounting for uncertainty? Sounds like you're intentionally low-balling me here after 10 years of hard work together.") Of course from the other co-founder's point of view 70k of debt hanging over one's head is not a fun prospect either. But nothing at first glance here, without additional details, jumps out as me as brazenly unreasonable from either side.

fastball 5y ago

Why would we expect a company that has been steadily reversing that trend to follow that trend? Suddenly because a founder is leaving you expect them to start turning a profit again? That seems a little backwards.

dwohnitmok 5y ago
Has that been true? I don't know what the company's financials have looked like year over year. > Suddenly because a founder is leaving you expect them to start turning a profit again? No, it's more a question of whether you think the company will ever turn a profit. That's probably the point of contention over how much the shares are worth: do you think Elementary OS will ever financially support a team? If not then you probably lean closer towards a 0 dollar valuation (or in this event 26k). If you do then you probably lean closer to a 100k valuation.
- fastball 5y ago
  Well the tweets said sales fell and haven't recovered since COVID, which has been going on for two years now. But regardless, the value of the shares are... whatever their value is now. It doesn't matter what they might be worth in 10 years if their current value is ~zero and a founder wants to divest them now.
  - dwohnitmok 5y ago
    > It doesn't matter what they might be worth in 10 years if their current value is ~zero and a founder wants to divest them now. But the current value of shares is intimately tied to what their expected future value is. Indeed in the absence of an acquisition or IPO this is the only way to determine the current value of shares. And if different people disagree on their expected future value, they will disagree on their current value.
- yakak 5y ago
  From the looks of it they never turned a reliable profit to pay two developers. They received a one time anonymous donation in 2018[1], that led to the second developer and looks like they were averaging about 16K a year then. In general, I think what is wrong with this argument is that they are both in the wrong. They founded a company that should have been a 501c and now they are talking about its value as an asset based on the willingness of people to make donations to enable developers to work on a project. These kinds of cream on the top FOSS projects run as companies are largely relying on naive good will of people who want to fund the best project to adapt open source to them rather than the best portion of open source for them. [1]https://en.wikipedia.org/wiki/Elementary_OS https://en.wikipedia.org/wiki/Elementary_OS
toyg 5y ago
well, they'll basically lose half the costs immediately, since they'll stop paying the second developer's salary. If that's 16k and they lost 10k last year, this year they can be in the black if they don't dip further. This said, I reckon the real issue is that the guy wants 50/60k from the shares, so the lawyer went "we'll ask for 100k and negotiate"... but on the other side they probably think 26k was already a compromise, and aren't willing to budge further.

mdoms 5y ago

Yes, if we consider your completely imaginary numbers that have no basis in reality or even basic reasonableness then sure, it makes perfect sense.

dwohnitmok 5y ago
Those numbers are made up sure, but they're meant to demonstrate that a 26k valuation of 45% of your company after 10+ years in business means you effectively believe your company will never be able to support more than one employee (presumably the founder themselves), by contrasting with how modest even a 100k valuation means you think the future of the company will be. It's fine to believe Elementary OS will live on in perpetuity as a single person free lance project, but is a pretty stark contrast with where I think Elementary OS wants to go and means that one of the co-founders presumably should come out and say Elementary OS will never be a company, but rather a one-person free lance project. And I can easily understand how that would rub the other cofounder the wrong way ("Oh so you believe that Elementary OS will eventually be able to hire a team down the road but you're offering me a price that indicates the opposite, even after accounting for uncertainty? Sounds like you're intentionally low-balling me here after 10 years of hard work together.") Of course from the other co-founder's point of view 70k of debt hanging over one's head is not a fun prospect either. But nothing at first glance here, without additional details, jumps out as me as brazenly unreasonable from either side.