Winning A Bidding War With Facebook, Google Picks Up The Entire Milk Team • Hacker News Board

Re: Winning A Bidding War With Facebook, Google Picks Up The Entire Milk Team

#71

Post by Drbble » Fri, Mar 16, 2012, 6:59 AM UTC

Drbble wrote: post #64

joering2 wrote: post #37

Earlier quoted context omitted.

So I heard this hundred times before and while it feels like Google (in this example) is making mistake, perhaps the second bottom here is that they wanted to shut down a competitor (at some field) and the nice way of doing it is to acquire. Then Google won't care if they find themselves behind gold cage of Google or not. They may leave or whatever. I don't think dropping $30MM is a big problem for Google either. For…

0.1% of Google's capitalization just to knock out 15 people is not a sustainable strategy.

Ack, no, it's 0.01% for 8 people. Slightly more sustainable than I thought.

Re: Winning A Bidding War With Facebook, Google Picks Up The Entire Milk Team

#72

Post by dflock » Fri, Mar 16, 2012, 7:43 AM UTC

repsilat wrote: post #69

sbov wrote: post #26

Earlier quoted context omitted.

All employees should bring in more than they cost. Even the fry guy at McDonalds. Otherwise why would you employ them?

I'm sure there are a few people that Google employs "Because awesome." The self-driving cars thing comes to mind, though I'm sure that could be explained by giving people another hour every day to sit on the internet looking at ads.

Currently all of the Google Maps data for the US (and increasingly, other parts of the globe) is generated in-house by the street view cars - they don't just generate the data for street view, they also generate most of the data for the actual road layout of the maps now, too.

If the cars drove themselves, instead of Google having to pay actual people to drive around every single road on the planet all the time, that would be a pretty huge cost saving, I would imagine.

Re: Winning A Bidding War With Facebook, Google Picks Up The Entire Milk Team

#73

Post by beagle3 » Fri, Mar 16, 2012, 3:25 PM UTC

Drbble wrote: post #66

notbitter wrote: post #44

Earlier quoted context omitted.

Usually: millions to the investors and founders for their stock. Employee stock will be worth little due to investor preferences. The acquirer will pay hundreds of thousands to retain a few "key employees", and tens of thousands to the ordinary developers (similar to what they'd get as a hiring bonus). This is why it doesn't make sense to be a startup employee. Your question about why developers can't capture more of…

You seem to be assuming a gargantuan preference in this case. I thought just 1x to 2x was the max these days.

Let's look at the numbers:

Let's say investor puts $1M with x2 liquidation preferences into company valued $3M pre-money (25% equity post money). Company then gets acquired for $20M. Investor gets $2M+$4.5M=$6.5M, rest get $13.5 (of which a much larger part usually goes to founders, and a small part to employees - e.g. $12M to 2 founders, $1.5M to 15 employees)

If they put $5M with x2 into company valued $5M pre-money, and company gets aquired for $20M, investor gets $15M, rest get $5M. Employees will often get a nice signing bonus from it, but the only one who can have a potentially life changing event is the founder.