3 ms·

Very impressive achievement for his age, though there is of course also a lot of spin-doctoring involved[1]. Stripe seems to be heading into the right direction

Very impressive achievement for his age, though there is of course also a lot of spin-doctoring involved[1]. Stripe seems to be heading into the right direction. [1] The whole "millionaire at 17" bit decodes to getting a big stock-based exit for Auctomatic with modest cash. Said stock then dropping to pennies shortly thereafter (~40x drop in stock price). Add in the merger and $600k in financing and there probably wasn't left other than a bailout for the investors. http://www.otcmarkets.com/stock/LIVC/chart http://www.otcmarkets.com/stock/LIVC/chart

jacquesm 14y ago
So, if we limit the 'millionaire at 17' bit to 'those that made a non-cash exit for 6 figures and up' would that satisfy you? To take cash or stock is a difficult decision for seasoned business people, I really can't fault a 17 year old for going that route and through no fault of their own see the value of that stock evaporate a short while later. I've known quite a few people that went bust during the .com debacle in exactly the same way and none of them was 17 or even close to it. It's easy enough to identify your mistakes after the fact (heck, I've made plenty, just this particular one I've managed to avoid), but the big trick is to predict them ahead of time. How are you doing? What company did you sell for any amount when you were 17? And was that in stock or cash?
- jacalata 14y ago
  I didn't read the parent as saying 'not actually a millionaire because he's an idiot', you seem a little touchy here. It seems reasonable to ask for that clarification - if you make the assumption that both brothers came into control of millions of dollars worth of available assets, you might wonder what they were doing with the money, especially as related to their continuing business ventures. The additional information that they don't actually have it answers that question.
  - jacquesm 14y ago
    'spindoctoring' indicates a conscious effort to increase the stature of the subject of the article, and is a word with a strong negative connotation. The fact that they had an idea, built it and executed their vision successfully enough that another company bought them out are the bits that matter. That the buying party was significantly reduced in value after the acquisition is not their fault, and even if it had not it would have been stock (likely with all kinds of encumbrances) not cash. Doing a stock deal is risky at best and can end very bad for the acquiree. Assets are not money, stock is not money, even so for a 17 year old that was an absolutely amazing track record. I'm not clear on the details of that particular deal, and frankly I don't even care. All I know is that most people here would dream of doing a deal like that or even being in the position to make that particular mistake, and hindsight (the company acquiring tanking shortly thereafter) is 20/20.
    - mibbitier 14y ago
      > "The fact that they had an idea, built it and executed their vision successfully enough that another company bought them out are the bits that matter." As far as I remember, it was a "buy the team, shut down the company" deal. The very fact that people in this thread are mistakenly saying that eBay bought the company, shows how well the spindoctoring worked.
- vancouverite 14y ago
  Jacques, I don't see what relevant my track record has on the argument [1]. I have nothing but admiration for the two brothers. They have done impressive things for their age. My comment was directed at the spin doctoring of Silicon Valley which is likely the aggregate results of marketing effort by Ycombinator (great exit story), their other investors (same), the brothers themselves (CV building) and the general SV media frenzy ("teen millionaire" sells). The problem is that such craziness only fuels silly perceptions. Look at this post. Much of it is devoted to finding some magic process in their parenting! The story real story here is likely along the lines of: be born with good intellectual capacity (genetics), have educated parents of reasonable means in an advanced country who can provide good schooling (lottery), don't have too many social strains during upbringing (divorces, violence, drugs, etc.), enroll in an elite program (Ycombinator), and rely on the efforts of a whole ecosystem to enable PR wins. Much of the above is luck and not some kind of easily repeatable process for creating successful people. Note that this doesn't take anything way from the brothers. They still needed to follow the path, work hard and make good decisions. That's impressive but there is no magic here. Regarding the Auctomatic exit, keep in mind that they were not bought by some gigantic company whose stock price was subject to many outside factors (like ebay - spin doctor much?). Their buyer, Live Current Media, was specifically created as a new public company for their acquisition. The stock price of the company at $2/share is almost entirely an imaginary number (no meaningful capital was raised during the founding "IPO" so there is no external validation - the first real material share transaction a few months later pegs the price below $0.2 already). Cash payment during the transaction appears to have been around $800k which was later converted to convertible notes when Live Current Media couldn't pay and had to restructure the deal in 2009. The remaining stock portion of ~$4M converts to ~2M shares (at $2/share) which then dropped to about $100k. Allocation to the four (or three) founders seemed to have been ~400k shares, so $20k on liquidity (for all of them together) [2]. During that period (new entity in 2008, restructuring in 2009), it appears that one or both of the brothers were part of the management team of the new entity (I am not saying that they caused the stock drop, just that this is different from selling a company to Google and then have Google's stock drop later). Again, their accomplishment relative to their age is impressive. Building and selling anything is hard. But Live Current Media basically bought a domain name and paid domain name dollars for it (in real dollars). [1] Ironically, I did sell a company for mid 7 digits (all cash), though I was a few years older than the brothers. Doesn't matter to the argument though. [2] I know nothing about the transaction but I can read financial reports like this one: http://www.faqs.org/sec-filings/100329/Live-Current-Media-Inc_10-K/#b http://www.faqs.org/sec-filings/100329/Live-Current-Media-In...

jacquesm 14y ago

So, if we limit the 'millionaire at 17' bit to 'those that made a non-cash exit for 6 figures and up' would that satisfy you? To take cash or stock is a difficult decision for seasoned business people, I really can't fault a 17 year old for going that route and through no fault of their own see the value of that stock evaporate a short while later. I've known quite a few people that went bust during the .com debacle in exactly the same way and none of them was 17 or even close to it. It's easy enough to identify your mistakes after the fact (heck, I've made plenty, just this particular one I've managed to avoid), but the big trick is to predict them ahead of time. How are you doing? What company did you sell for any amount when you were 17? And was that in stock or cash?

jacalata 14y ago
I didn't read the parent as saying 'not actually a millionaire because he's an idiot', you seem a little touchy here. It seems reasonable to ask for that clarification - if you make the assumption that both brothers came into control of millions of dollars worth of available assets, you might wonder what they were doing with the money, especially as related to their continuing business ventures. The additional information that they don't actually have it answers that question.
- jacquesm 14y ago
  'spindoctoring' indicates a conscious effort to increase the stature of the subject of the article, and is a word with a strong negative connotation. The fact that they had an idea, built it and executed their vision successfully enough that another company bought them out are the bits that matter. That the buying party was significantly reduced in value after the acquisition is not their fault, and even if it had not it would have been stock (likely with all kinds of encumbrances) not cash. Doing a stock deal is risky at best and can end very bad for the acquiree. Assets are not money, stock is not money, even so for a 17 year old that was an absolutely amazing track record. I'm not clear on the details of that particular deal, and frankly I don't even care. All I know is that most people here would dream of doing a deal like that or even being in the position to make that particular mistake, and hindsight (the company acquiring tanking shortly thereafter) is 20/20.
  - mibbitier 14y ago
    > "The fact that they had an idea, built it and executed their vision successfully enough that another company bought them out are the bits that matter." As far as I remember, it was a "buy the team, shut down the company" deal. The very fact that people in this thread are mistakenly saying that eBay bought the company, shows how well the spindoctoring worked.
vancouverite 14y ago
Jacques, I don't see what relevant my track record has on the argument [1]. I have nothing but admiration for the two brothers. They have done impressive things for their age. My comment was directed at the spin doctoring of Silicon Valley which is likely the aggregate results of marketing effort by Ycombinator (great exit story), their other investors (same), the brothers themselves (CV building) and the general SV media frenzy ("teen millionaire" sells). The problem is that such craziness only fuels silly perceptions. Look at this post. Much of it is devoted to finding some magic process in their parenting! The story real story here is likely along the lines of: be born with good intellectual capacity (genetics), have educated parents of reasonable means in an advanced country who can provide good schooling (lottery), don't have too many social strains during upbringing (divorces, violence, drugs, etc.), enroll in an elite program (Ycombinator), and rely on the efforts of a whole ecosystem to enable PR wins. Much of the above is luck and not some kind of easily repeatable process for creating successful people. Note that this doesn't take anything way from the brothers. They still needed to follow the path, work hard and make good decisions. That's impressive but there is no magic here. Regarding the Auctomatic exit, keep in mind that they were not bought by some gigantic company whose stock price was subject to many outside factors (like ebay - spin doctor much?). Their buyer, Live Current Media, was specifically created as a new public company for their acquisition. The stock price of the company at $2/share is almost entirely an imaginary number (no meaningful capital was raised during the founding "IPO" so there is no external validation - the first real material share transaction a few months later pegs the price below $0.2 already). Cash payment during the transaction appears to have been around $800k which was later converted to convertible notes when Live Current Media couldn't pay and had to restructure the deal in 2009. The remaining stock portion of ~$4M converts to ~2M shares (at $2/share) which then dropped to about $100k. Allocation to the four (or three) founders seemed to have been ~400k shares, so $20k on liquidity (for all of them together) [2]. During that period (new entity in 2008, restructuring in 2009), it appears that one or both of the brothers were part of the management team of the new entity (I am not saying that they caused the stock drop, just that this is different from selling a company to Google and then have Google's stock drop later). Again, their accomplishment relative to their age is impressive. Building and selling anything is hard. But Live Current Media basically bought a domain name and paid domain name dollars for it (in real dollars). [1] Ironically, I did sell a company for mid 7 digits (all cash), though I was a few years older than the brothers. Doesn't matter to the argument though. [2] I know nothing about the transaction but I can read financial reports like this one: http://www.faqs.org/sec-filings/100329/Live-Current-Media-Inc_10-K/#b http://www.faqs.org/sec-filings/100329/Live-Current-Media-In...