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Posterous Acquires Fellow Y Combinator Alum Slinkset
- brandnewlow 17y agoIt's unusual for one YC company to acquire another, right?
- jmtame 17y agoi think it will become inevitable. as yc increases its number of investments, there will be more companies doing similar things and competing. i think the ethos of yc is to prefer a partnership (or downright acquisition) over competition, as most times, you have other competitors, and you can find ways to team up and take on the big guys. why not work with the same people who went through the same seed fund as you? the real question is: at what point is it acceptable to merge or get acquired? paypal and x.com were a great example of what can happen through a merger. they could have spent their time killing each other, but they merged and set their focus on much bigger things: taking advantage of ebay's mismanagement and poor execution to deliver the world's leading online payment platform. private acquisitions seem strange, but i have always believed that the real reason large companies cannot form from start-ups is because people may be too resistant to team up with their leading competitors to take on an even larger competitor. i wonder what would become of microsoft had they not teamed up with ibm, or apple.
- Frocer 17y agoFrom what I have read, I think the PayPal and X.com merger did more harm than good. There were a ton of ego clashes, technology preference differences (unix vs. .net), etc. But merging with the right team will certainly help, and I am sure the 2 teams coming out of the same YC class probably know each others' capabilities fairly well.
- rms 17y agoCongratulations guys! (even more so because there is a screenshot of my slinkset on Techcrunch!)
- sachinag 17y agoWell, that's one way to get exceptional coders (I assume Garry and the other Sachin made them sign employment agreements).
- zhyder 17y agoSince the acquisition was likely done with stock, vanilla vesting would be enough to make them stick around.
- vaksel 17y agodid some money change hands?
- rms 17y agoThey're not going to tell us, but it seems obvious to me that the bulk of the deal was in stock. Crunchbase has posterous's funding as YC's 15k + 725k in an uber-angel round which doesn't make a cash acquisition realistic.
- sachinag 17y agoI am the other Sachin Agarwal (at Dawdle.com), and I know nothing, but I will say this: I will bet you a beer that you're wrong. As an acquiror, you want to do a deal as cheaply as possible. Given that Slinkset never really took off while Posterous has, a deal was probably done in the sub-six figures or perhaps none with just offers of employment. At this point, even though you lose the cash, it's cheaper to use $50K cash than $50K in stock given that you'd reasonably expect the stock to appreciate in value at this point. Acquisitions usually only happen in stock in either "pooling" transactions (i.e. Kayak/SideStep), where the acquiror cannot afford to pay cash (i.e. pick your keiretsu deal from the late 90s), or the seller values the stock more than cash (i.e. Twitter/Summize). Why, yes, I am a former technology M&A investment banker.
- zhyder 17y agoIt depends on how much you want them versus how much they want you. If you can't attract them with just cash, you're going to have to give stock. Considering the Slinkset guys are hungry entrepreneurs who'd probably want a stake, and an all-cash transaction in 6 figures wouldn't make them f@#$-you rich anyway, I'd guess this was a most- if not all-stock deal. It also depends on what Posterous's cash situation is like; if much of the 750k is lying around idle, they'd want to spend it, else they'd rather avoid having to raise money again, which would result in giving up even more equity. Plus, all else being equal, I'd rather share equity with cofounders/employees than with investors.
- gojomo 17y ago
- medianama 17y agoIs it really newsworthy?
- yan 17y agoIs "acquires" just a fancy term for "agreed to work together"?
- jmtame 17y agothat's usually a partnership. an acquisition typically involves quite a bit more on the business and operations side.
- bravura 17y agoHow can a company with only $740K (http://www.crunchbase.com/company/posterous http://www.crunchbase.com/company/posterous) afford to acquire Slinkset? Equity?
- jmtame 17y agoprobably a stock swap.
- deleted 17y ago[deleted]
- jonursenbach 17y agoIn this day and age, you can do quite a lot with 740k.
- watchmvp 17y agohttp://www.watches-space.com/Dior-Watches.html http://www.watches-space.com/Dior-Watches.html Dior Watches
- nostrademons 17y agoCongrats Slinksetters!
- jjs 17y agoThis doesn't appear to be their exit; more like a new beginning.
- nostrademons 17y agoIs that any less deserving of congratulations?
- deleted 17y ago[deleted]
- jjs 17y agoNot at all; I was just under the (mis?)impression that you intended to congratulate them for something that hasn't happened yet.
- FreeRadical 17y agoDoes anyone have any ideas how posterous intends to make money?
- webwright 17y agoWell, you could take a look at WordPress (whose revenue growth is pretty enviable). Hosted blogs, premium add ons.
- watchmvp 17y ago<a href="http://www.watches-space.com/Dior-Watches.html>Dior http://www.watches-space.com/Dior-Watches.html>Dior Watches</a>
- prakash 17y agoCongrats to both the companies, the future is bright for both kind of services as stand alone's or as an integrated service.
- watchmvp 17y agohttp://www.watches-space.com/Dior-Watches.html http://www.watches-space.com/Dior-Watches.html Dior Watches