Loopt acquired by payment card provider for $43.3m in cash • Hacker News Board

Re: Loopt acquired by payment card provider for $43.3m in cash

#91

Post by coffeemug » Fri, Mar 09, 2012, 8:59 PM UTC

blasterford wrote: post #86

webwright wrote: post #85

Earlier quoted context omitted.

You should consider your tone here. It's unwarranted. You literally know nothing about what went on here, know nothing about the value that they're are getting (patents? team?). Is it okay/smart for Facebook to buy/hire a team of 4 engineers for $8M or is that because they are buddies with VCs? I assume Loopt had an engineering team of 20+. Is it that out of bounds to think that that (plus patents and perhaps some te…

If the team were worth that much, then they would have made Loopt astoundingly profitable in the last 7 years, and we'd all be using it. Judge people on their success/failure. Not on what other people think of them. Loopt was a flawed, quickly obsoleted idea. That was pretty obvious from the outset.

Plenty of great teams never see the light of day, and plenty of mediocre teams have huge successes. Luck matters.

Re: Loopt acquired by payment card provider for $43.3m in cash

#92

Post by blasterford » Fri, Mar 09, 2012, 9:00 PM UTC

coffeemug wrote: post #91

blasterford wrote: post #86

Earlier quoted context omitted.

If the team were worth that much, then they would have made Loopt astoundingly profitable in the last 7 years, and we'd all be using it. Judge people on their success/failure. Not on what other people think of them. Loopt was a flawed, quickly obsoleted idea. That was pretty obvious from the outset.

Plenty of great teams never see the light of day, and plenty of mediocre teams have huge successes. Luck matters.

A terrible idea is still a terrible idea. Luck matters, but only if you don't have a terrible idea.

Re: Loopt acquired by payment card provider for $43.3m in cash

#93

Post by webwright » Fri, Mar 09, 2012, 9:01 PM UTC

blasterford wrote: post #86

webwright wrote: post #85

Earlier quoted context omitted.

You should consider your tone here. It's unwarranted. You literally know nothing about what went on here, know nothing about the value that they're are getting (patents? team?). Is it okay/smart for Facebook to buy/hire a team of 4 engineers for $8M or is that because they are buddies with VCs? I assume Loopt had an engineering team of 20+. Is it that out of bounds to think that that (plus patents and perhaps some te…

If the team were worth that much, then they would have made Loopt astoundingly profitable in the last 7 years, and we'd all be using it. Judge people on their success/failure. Not on what other people think of them. Loopt was a flawed, quickly obsoleted idea. That was pretty obvious from the outset.

"If the team were worth that much, then they would have made Loopt astoundingly profitable in the last 7 years, and we'd all be using it."

Great teams can attack crappy markets or just get the timing wrong. The leadership team that brought Apple back from the brink was the same team that built NeXT. Next wasn't astoundingly profitable and none of us were using it.

Re: Loopt acquired by payment card provider for $43.3m in cash

#94

Post by blasterford » Fri, Mar 09, 2012, 9:07 PM UTC

webwright wrote: post #93

blasterford wrote: post #86

Earlier quoted context omitted.

If the team were worth that much, then they would have made Loopt astoundingly profitable in the last 7 years, and we'd all be using it. Judge people on their success/failure. Not on what other people think of them. Loopt was a flawed, quickly obsoleted idea. That was pretty obvious from the outset.

"If the team were worth that much, then they would have made Loopt astoundingly profitable in the last 7 years, and we'd all be using it." Great teams can attack crappy markets or just get the timing wrong. The leadership team that brought Apple back from the brink was the same team that built NeXT. Next wasn't astoundingly profitable and none of us were using it.

Jobs had already had amazing success when previously at Apple. He had already proved himself effective.

Re: Loopt acquired by payment card provider for $43.3m in cash

#95

Post by OoTheNigerian » Fri, Mar 09, 2012, 9:16 PM UTC

kogir wrote: post #55

OoTheNigerian wrote: post #3

I think Loopt made an error in partnering exclusively with carriers. I remember when I was in the UK and heard of loopt the first tifme. I visited the site and was told to put in a US number. It was there they lost it. I am really looking forward to what Sam has up his sleeves now that he is free.

You're essentially saying that trying to do Loopt at all was a mistake and we just should have done something else. Everyone seems to forget that before iPhone, and later Android, you had no choice but to partner with carriers - there was no other way to distribute your application. Even in Europe, where the phone ecosystem is different, access to location required carrier support, and nearly no handsets had the abil…

No man. I am not saying Loopt was a mistake. I reiterate that the exclusivity with the carriers was a mistake.

I was in the UK 2008-2010 and you could only get Loopt through American carriers. BTW, far back early 2000s, you could get mobile software from getjar.

Re: Loopt acquired by payment card provider for $43.3m in cash

#96

Post by rksf » Fri, Mar 09, 2012, 9:22 PM UTC

gojomo wrote: post #49

alapshah wrote: post #9

In case anyone is missing what has happened here, this is why people hate on private equity/VC. As far as I can tell, Loopt wasn't doing very well. http://www.google.com/insights/search/#q=loopt.com&cmpt=... They had an attempt to revive the company to compete with Groupon last year that many here thought was stupid and died an early death ( http://news.ycombinator.com/item?id=2696412 ) Michael Moritz (Sequoia partne…

If the $17 million previously raised bought half or less of the outstanding equity, then the VCs (depending also on other preferences) might only have a claim on about ((43.4 total - 9.8 retention pool)*50%=) $16.8 million of the deal proceeds. So this might be a largely-sideways exit for the venture investors. Still, many think location services can only pay off via connections with payments/coupons/promotions so th…

Typically, venture rounds are participating preferred securities (at least). So, the more likely scenario here is: 43.4 MM Sale Less: 9.8 Cash Retention Pool = 33.6 MM Available for Shareholders

Less: 17MM Preferred to VCs (Face Value of VC Investment) = 16.6 MM (split among VCs, founders, employees)

VC Participating Share: ~35% * 16.6 = ~5MM

Available for Founders / Employees = 11MM

Total to VCs = 17+5=22MM

Re: Loopt acquired by payment card provider for $43.3m in cash

#97

Post by lyime » Fri, Mar 09, 2012, 9:23 PM UTC

Congrats to Sam and the team. Green Dot is lucky to have him.

During last summer at YC Sam helped us quite a bit on different fronts. He has this amazing clarity in his thought process and is generally a really helpful guy.

Re: Loopt acquired by payment card provider for $43.3m in cash

#98

Post by ajju » Fri, Mar 09, 2012, 9:27 PM UTC

rksf wrote: post #96

gojomo wrote: post #49

Earlier quoted context omitted.

If the $17 million previously raised bought half or less of the outstanding equity, then the VCs (depending also on other preferences) might only have a claim on about ((43.4 total - 9.8 retention pool)*50%=) $16.8 million of the deal proceeds. So this might be a largely-sideways exit for the venture investors. Still, many think location services can only pay off via connections with payments/coupons/promotions so th…

Typically, venture rounds are participating preferred securities (at least). So, the more likely scenario here is: 43.4 MM Sale Less: 9.8 Cash Retention Pool = 33.6 MM Available for Shareholders Less: 17MM Preferred to VCs (Face Value of VC Investment) = 16.6 MM (split among VCs, founders, employees) VC Participating Share: ~35% * 16.6 = ~5MM Available for Founders / Employees = 11MM Total to VCs = 17+5=22MM

>typically, venture rounds are participating preferred securities (at least)

That is increasingly false for A rounds, at least.

This 2 year old discussion talks about that, but from what I hear these days, any startup that doesn't "desperately" need money will not agree to participating preferred in the valley.

http://www.quora.com/How-common-are-participating-preferred-...

Re: Loopt acquired by payment card provider for $43.3m in cash

#99

Post by bitterfounder0 » Fri, Mar 09, 2012, 9:39 PM UTC

majani wrote: post #45

alapshah wrote: post #9

In case anyone is missing what has happened here, this is why people hate on private equity/VC. As far as I can tell, Loopt wasn't doing very well. http://www.google.com/insights/search/#q=loopt.com&cmpt=... They had an attempt to revive the company to compete with Groupon last year that many here thought was stupid and died an early death ( http://news.ycombinator.com/item?id=2696412 ) Michael Moritz (Sequoia partne…

Buddy exits like this one and the Hunch exit are very demoralising. They make startups look like some sort of game. As you indicated, Loopt was clearly dying ( http://www.google.com/insights/search/#q=loopt.com&cmpt=... ) and yet people still got rich off of it. Product + Hype -> Big Exit is starting to seem like a perfectly legitimate business plan nowadays.

Demoralizing indeed.

Google's acquisition of Slide for $100m crushed me. Myself and several others built more successful companies. We had 10x the userbase, larger profits (assuming this based on userbase), and fewer employees (team of 3 here). The difference was I was bootstrapped and working in stealth.

Lesson's learned: avoid bootstrapping. Raise venture capital from well networked investors. Do not work in stealth mode. Do a lot of PR. Be loud!

This ensures that the failure of your company will be an embarrassment for your investors. The louder the better. They will be inclined to have a friend buy you out to save face.

Disclaimer. I'm not saying that should be your primary goal. Goal number one should be passionately building a product you love. A buddy exit is simply a safety net.

Re: Loopt acquired by payment card provider for $43.3m in cash

#100

Post by pg » Fri, Mar 09, 2012, 9:41 PM UTC

Congratulations, Sam!

Though Sam himself may not realize it, he has had a big effect on Y Combinator. One of the most important components of YC is the alumni network. It's now quite large (over 800 people) and the founders help one another a lot. We can affect the size of the alumni network very directly, but we have less control over how much they help one another-- without which of course the size doesn't matter.

Sam is, more than any other single person, the one who set the standard for how much the alumni help one another. He set it by example. After each new batch of founders got lots of help from Sam, it seemed natural to them when they in turn became alumni to help new founders that much. We encourage the founders to help one another of course, but Sam's example had more effect than our exhortations. And we lucked out in that respect because Sam is remarkably generous with his time. He's a sort of natural teacher.

He also knows everyone. He has not only done countless introductions for alumni, but did most of the initial intros in Silicon Valley for YC itself. He introduced us to our lawyer, Wilson Sonsini, and he was even the one who introduced us to Sequoia. YC now does many intros per day, but if you follow the tree back to the beginning, Sam was the root node.