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> Tumblr's employees will also do well. The company's first 10 employees will receive an average of $6.2 million in cash; the first 30 will receive an average o

by dot 13y ago

> Tumblr's employees will also do well. The company's first 10 employees will receive an average of $6.2 million in cash; the first 30 will receive an average of $3.3 million in cash, and the rest of the 178 employees will each receive $371,000. Is it usual to announce these numbers for all employees with acquisitions like this?

gyardley 13y ago
No, but note that this information's not coming from Tumblr - it's coming from an analyst who claims it's based on some financing documents he obtained. Whether you trust it or not is up to you.
SatvikBeri 13y ago
These are all estimates from this article: http://business.time.com/2013/05/21/inside-yahoos-tumblr-deal-heres-who-hit-the-billion-dollar-jackpot/ http://business.time.com/2013/05/21/inside-yahoos-tumblr-dea... Which in turn got them from a company called PrivCo: http://www.privco.com/ http://www.privco.com/ Who knows how accurate they are.
larrys 13y ago
"the rest of the 178 employees will each receive $371,000." Interesting to keep in mind for anyone working for a startup as a metric. You work and have a chance, if the idea hits (to the tune of 1 billion) of making low to mid 6 figures. $371k is certainly nice but considering the amount of startups that not only don't succeed but don't succeed to the extent that Tumblr did ...
- krschultz 13y ago
  That said, being the 41st person at a startup is not exactly risky and I wouldn't expect you to be taking a below market salary in exchange for shares at that point. So market salary + $371k bonus isn't a bad deal.
  - 7Figures2Commas 13y ago
    > So market salary + $371k bonus isn't a bad deal. It isn't necessarily a great deal either though. Somebody making market salary at a startup in one of the most expensive cities in the world may very well be saving less than somebody grossing a considerable amount less in a less expensive area, and after taxes that $371,000 bonus isn't a whole lot more than the base salary for a first year associate attorney at a major law firm in New York. So while I wouldn't call the outcome here disappointing for anybody involved, I think it does highlight the generally poor economics of equity for startup employees: even when your company hits a grand slam, the windfall is rarely a short cut to the type of wealth that is frequently achieved by starting a successful small business or going into a lucrative profession.
    - krschultz 13y ago
      That's neither here nor there. For one thing, software engineering is a lucrative profession. It pays more than most other white collar jobs in New York, except some law, some finance, and some consultants. But it is certainly better than the large swaths of people in marketing, HR, PR, accounting, etc. The choice of city vs not city is completely independent of the startup vs non-startup thing. If you are intent solely on maximizing cash in your pocket, then I doubt startups are the best path. If you want that, just go work on wall street. I grew up around that, and I've known for a long time that no matter how much money there is in it, it's not a great life.
- bluedino 13y ago
  Imagine being at Instagram, $1bn and only what, 14 employees?
  - jonknee 13y ago
    You would have ended up with a bunch of Facebook stock that immediately started to free fall before you could sign the documents.
michaelochurch 13y ago
and the rest of the 178 employees will each receive $371,000. So they get a one-time mid-level banking bonus, and now they work for a completely different company and almost certainly in positions lower than what they used to have. VCs would quit given year-end bonuses like that.
- ry0ohki 13y ago
  They did get paid a salary, benefits, etc... they took almost none of the risk that would be worth a higher reward

by dot 13y ago

gyardley 13y ago

No, but note that this information's not coming from Tumblr - it's coming from an analyst who claims it's based on some financing documents he obtained. Whether you trust it or not is up to you.

SatvikBeri 13y ago

These are all estimates from this article: http://business.time.com/2013/05/21/inside-yahoos-tumblr-deal-heres-who-hit-the-billion-dollar-jackpot/ http://business.time.com/2013/05/21/inside-yahoos-tumblr-dea... Which in turn got them from a company called PrivCo: http://www.privco.com/ http://www.privco.com/ Who knows how accurate they are.

larrys 13y ago

"the rest of the 178 employees will each receive $371,000." Interesting to keep in mind for anyone working for a startup as a metric. You work and have a chance, if the idea hits (to the tune of 1 billion) of making low to mid 6 figures. $371k is certainly nice but considering the amount of startups that not only don't succeed but don't succeed to the extent that Tumblr did ...

krschultz 13y ago
That said, being the 41st person at a startup is not exactly risky and I wouldn't expect you to be taking a below market salary in exchange for shares at that point. So market salary + $371k bonus isn't a bad deal.
- 7Figures2Commas 13y ago
  > So market salary + $371k bonus isn't a bad deal. It isn't necessarily a great deal either though. Somebody making market salary at a startup in one of the most expensive cities in the world may very well be saving less than somebody grossing a considerable amount less in a less expensive area, and after taxes that $371,000 bonus isn't a whole lot more than the base salary for a first year associate attorney at a major law firm in New York. So while I wouldn't call the outcome here disappointing for anybody involved, I think it does highlight the generally poor economics of equity for startup employees: even when your company hits a grand slam, the windfall is rarely a short cut to the type of wealth that is frequently achieved by starting a successful small business or going into a lucrative profession.
  - krschultz 13y ago
    That's neither here nor there. For one thing, software engineering is a lucrative profession. It pays more than most other white collar jobs in New York, except some law, some finance, and some consultants. But it is certainly better than the large swaths of people in marketing, HR, PR, accounting, etc. The choice of city vs not city is completely independent of the startup vs non-startup thing. If you are intent solely on maximizing cash in your pocket, then I doubt startups are the best path. If you want that, just go work on wall street. I grew up around that, and I've known for a long time that no matter how much money there is in it, it's not a great life.
bluedino 13y ago
Imagine being at Instagram, $1bn and only what, 14 employees?
- jonknee 13y ago
  You would have ended up with a bunch of Facebook stock that immediately started to free fall before you could sign the documents.

michaelochurch 13y ago

and the rest of the 178 employees will each receive $371,000. So they get a one-time mid-level banking bonus, and now they work for a completely different company and almost certainly in positions lower than what they used to have. VCs would quit given year-end bonuses like that.

ry0ohki 13y ago
They did get paid a salary, benefits, etc... they took almost none of the risk that would be worth a higher reward