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

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

#101

Post by sbov »

bitterfounder0 wrote: post #99
majani wrote: post #45

Earlier quoted context omitted.

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 stealt…

At some point, depending upon why they're buying, I think having fewer employees is a bad thing. It means whoever is acquiring you has to do more work to turn it into a fully fledged business. At least that's the sentiment I heard when our startup sold (4 employees total).

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

#102

Post by apu »

suking wrote: post #24
sama wrote: post #20

Earlier quoted context omitted.

not true at all.

* ready to sell business because it wasn't going anywhere, sequoia knew greendot well and got them to get a return on the $ put in so it wasn't a total buss. Hence the huge (relative to the sale) incentive for founders to stick around since they got nothing from the sale. is my guess.

Not sure if you figured this out, but sama = Sam Altman = ceo of Loopt. I think sama's words on this situation carry a little more weight than your guess.

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

#103

Post by [deleted] »

nikcub wrote: post #23
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…

raising debt to pay a dividend back to investors is more common than not amongst the LBO funds. it makes sense if you have a steady and decent income stream, it is a bit like drawing down on equity in your house in order to take a holiday, except the rates are much better (when people complain about this, I am not really sure what they want to be done about it) the VCs of silicon valley are very far away from the Wal…

[deleted]

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

#104

Post by 2pasc »

kenrikm wrote: post #80
2pasc wrote: post #60

The sad truth about startup life and Silicon Valley is that many people become wealthy not because they created something meaningful with lots of customers or users or revenues, but because they get acquired and let die. This would be all fine if founders did not equate net worth with success and smarts. I admire Companies that get acquired and where the product continue to live on beyond the acquisition like PayPal,…

I think you're missing the point, If you're in this just to get wealthy there are many other professions that offer a much safer route to get there (Lawyer, Doctor) I don't think you just fall into being an entrepreneur for the money, otherwise you would give up when you're eating ramen noodles pulling 18 hour shifts for months on end without a return. Nope, I think to build a company you need something else driving…

I don't know SamA, and so I am not saying this against him at all. Nor am I saying that people become entrepreneur for the money. As you mention, there are safer routes to get money. I am describing something I have observed in Silicon Valley, especially in the last few years. You have the lucky folks who flipped their Company fast, and sometimes see themselves as the master of the universe. You also have the dedicated ones - and Dennis Crowley from Dodgeball and Foursquare is definitely in this category.

I think it is sad, especially because of all the efforts that we as entrepreneurs put into these Companies. Most of all, I criticize this general sentiment in SV right now, that success=money through acquisition/IPO. If SamA gets his vision realized through Green Dot - all the better for him and for the Loopt team! (and us as users!)

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

#105

Post by anon808 »

webwright wrote: post #83
anon808 wrote: post #57

Earlier quoted context omitted.

"Could Sam and his group have $43M in impact for the buyer?" what do you mean by impact? how can this even be measured? "If your "leadership brand" number is high enough, you just about can't lose. " again, what does leadership brand mean? And what does it have to do with building a business that earns money/makes profit (revenue - expenses). Just because something/someone has market or exchange value, doesn't mean t…

"But saying there's some higher form of value that 'brands' bring that has nothing to do with building profitable businesses is disingenuous." Where the heck did I say that? I said building profitable businesses is a formula and leadership/brands are a multiplier in that (very complex) formula. I'm saying that A-Players with great brands have value. It's pretty hard to unravel that value. What's the financial impact…

you said success is a formula, and because you were talking about an exit for an unprofitable company as being a success, it seemed logical to me that you ranked ceo 'brand' value over business profitability.

People have value (in general), calling some people A-players is trying to ascribe value to some, and as you say, that's hard to unravel. I agree ranking and valuing people is hard/impossible, why should we try . . . why are you trying? Why not let people show their own value by doing great things. I don't disregard the value, i just admit that we don't know it, the only thing we do know is if a business made money or not. It doesn't mean the person that started a shitty business is also shitty, but it also doesn't mean they're a success if all the sudden someone bestowed a crown of exit on them.

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

#106

Post by anon808 »

bitterfounder0 wrote: post #99
majani wrote: post #45

Earlier quoted context omitted.

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 stealt…

don't be demoralized, and don't let others decide how you should run your business or what you should value. if you have a profitable business be happy with your success and build on it. lottery winners happen every day, don't let that ruin building great products and businesses for you. the problem with outside investors (any investors, VCs, angels etc.) is that your business automatically inherits their values, and if their values are different enough from yours the friction could destroy your business and/or destroy your values.

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

#107

Post by AznHisoka »

wilschroter wrote: post #37

I get so annoyed when I see people pick apart an acquisition. I saw this same behavior for Gowalla, and then Mint before it. "They didn't make any money. They sold too early." They remind me of people that would be sitting at the finish line of a marathon telling the last people to cross "Boy, your time really sucked." If you are one of the few entrepreneurs that has come far along enough to get to a sale - for any a…

While some of the comments may be negative...I just want to say that many many people here NOT like that. There are a lot of hard-working people who have hacked on projects, taken risks, and worked just as hard as Sam. But without the recognition, the acknowledgement, or the publicity. They hack on their side projects while holding a day job, while raising a kid, sacrificing sleep, health, etc. I feel some people just feel slighted when they see others receive a monetary reward because of this "publicity". But please.. many people here are also in the arena, just like Sam.

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

#108

Post by pg »

underwater wrote: post #64
webwright wrote: post #52

Earlier quoted context omitted.

I think calling this a "buddy exit" isn't really fair. Same with Hunch. That's like calling Next selling to Apple a "buddy exit". If Square went south, what kind of exit could they command based on Jack and his team? If Facebook was dying, what would Zuck and his team be worth? Sam and Chris are both brilliant guys and great BRANDS. Not Steve Jobs great-- but great nonetheless. Guys like this attract A-players and at…

> Sam and Chris are both brilliant guys and great BRANDS [...] Guys like this attract A-players and attract PR. What about the minor things like, you know, making money? They took 17 million in funding and failed. But that's OK because they're buddies with the VC's and can try, try again.

I know you meant this to be a nasty remark, but do you realize you're actually saying something very nice about VCs? You're saying that they're driven by loyalty to their friends rather than by profit.

That isn't really true. The main reason most VCs are friends with people is because they think they can make money out of them in the future. But it shows how far into falsehood you've leaned in your attempt to be nasty when you end up unintentionally implying something so nice it isn't true.

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

#109

Post by davidwhodge »

Congratulations to Sam & team.

A brief conversation with Sam was what convinced me to apply to YC in the first place, and I'm very glad I did. Sam has shown himself to be an expert, a smooth operator, and an excellent teacher. Green Dot is very lucky to have Sam & co joining them.

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

#110

Post by drusenko »

sbov wrote: post #101
bitterfounder0 wrote: post #99

Earlier quoted context omitted.

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 stealt…

At some point, depending upon why they're buying, I think having fewer employees is a bad thing. It means whoever is acquiring you has to do more work to turn it into a fully fledged business. At least that's the sentiment I heard when our startup sold (4 employees total).

It's no secret that the "going rate" for startups that are successful and get acqui-hired is $1-2M per engineer.

It's hard for big companies to find talented engineers, and so when they acqui-hire, they can just instantly shuffle those smart people out of the project they're working on and onto something else.

The bet is that each smart engineer will provide at least $1-2M of value to the company in the long-run.

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