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Atlassian Acquires Loom

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Re: Atlassian Acquires Loom

#331

Post by neilv »

gangstead wrote: post #114
pyrophane wrote: post #88

Earlier quoted context omitted.

Without knowing the specific of their last round, does anyone have an idea of what selling at roughly 2/3 of their previous valuation likely means for their employees? I know that VCs typically have some kind of "upside protection" in later rounds that guarantees them first money out in the event of a sale on some multiple of their investment, but I don't know what terms are common.

The startup system is pretty rigged against accidentally making anyone rich who is a mere employee. That money is for the investors, not the working class. The days of the office assistant making millions on stock are long gone. There's options with huge tax implications, long vesting periods, the investors get preferred stock, they get guaranteed multiples, if there's a down round there's a carve-out that you won't…

If I want to found a VC-funded startup for which a successful exit is much more fair to the employees, how do I do that?

Will the investors insist that it all come out of the founders' percentage of the pie, or can I argue that the better-incentived employees mean a bigger and more likely pie, so VC terms shoudl be less grabby?

Will VCs react negatively to "being soft on" employees, even if it all comes out of founders' slice?

Do early employees get ISOs, other options, RSUs, or something else?

Re: Atlassian Acquires Loom

#333

Post by pcurve »

Maybe it's just me, but in the video, the founder doesn't seem all that excited about the acquisition. It's almost like he's having second thoughts, but it's too late to back out.

Re: Atlassian Acquires Loom

#334

Post by lmeyerov »

toomanyrichers wrote: post #298
nlavezzo wrote: post #292

Earlier quoted context omitted.

That’s not how option pricing works. This is a private company, and it was raising money using preferred shares. The employee shares underlying the options would have been common stock. At least once a year the company would be required to do a 409a valuation to set the FMV for those underlying common shares and thus the strike price for any options in the next year or less. The 409a valuation for common shares is pr…

Yes. For instance, at an early stage company I co-founded, we saw 409A of 10% of the most recent priced round.

yes, this is very much stage-specific

by the time of these $100M+ rounds for $1B unicorns to hire a lot of people, the 90% discount is long gone

Re: Atlassian Acquires Loom

#335

Post by birken »

lmeyerov wrote: post #334
toomanyrichers wrote: post #298

Earlier quoted context omitted.

Yes. For instance, at an early stage company I co-founded, we saw 409A of 10% of the most recent priced round.

yes, this is very much stage-specific by the time of these $100M+ rounds for $1B unicorns to hire a lot of people, the 90% discount is long gone

It might not be a 90% discount but it still will be a >50% discount

Re: Atlassian Acquires Loom

#336

Post by birken »

theogravity wrote: post #303
mattpratt wrote: post #299

Earlier quoted context omitted.

They wouldn't have exercised at that valuation. The options would be priced based on the 409a, which would be much much less than 1.5B.

Depends on when the 409a was performed and when the exercise happened. When the startup I work at got our Series A, a new 409a was done and increased the share price by roughly the same multiple of the new valuation, and now I have a wide spread for AMT should I exercise my options because of the new 409a. So it's possible for employees to have joined after the new 409a when it was valued at 1.5bln and early exercise…

And then they'd have sold at the higher value, because the sale price is almost certainly higher than whatever the 409a price was.

Re: Atlassian Acquires Loom

#337

Post by jedberg »

j45 wrote: post #307
jedberg wrote: post #134

Earlier quoted context omitted.

Jira-1369 was closed four years ago.

As one of jira’s bigger brain farts, it seems it’s was recreated and continued in a new ticket. Open: https://jira.atlassian.com/browse/JRACLOUD-1369 Closed: https://jira.atlassian.com/browse/JRA-1369 The original JRA-1369 was opened in 2003. Addressed a little in 2019, but not the digests to solve it all. Odd since plug-ins have to. closing this is one way to improve optics I guess. Ps, I don’t hate Jira. Wasn’t a h…

Ah you're right, it was just reopened.

> Their worst sin remains how many people are subjected to an out of the box install compared to one that is setup to your processes. Tweaking it makes such a difference.

This is true, I hated out of the box Jira, and I tolerated it after I tweaked it for our org. Honestly, it probably shouldn't even work out of the box. It should just start with a single ticket that describes how to configure it, that you can't close until you configure some ways to close tickets.

Re: Atlassian Acquires Loom

#338

Post by no_wizard »

davinci123 wrote: post #113

Atlassian has a record of failed acquisitions: Bitbucket, HipChat, Trello, OpsGenie,.. and the list goes on. Add Loom to that list. In this market, when every single collab company is struggling, Atlassian goes and acquires a collab company when there are so many companies in the DevTools space or get your pick in AI. Spending a billion on a video sharing tool? Unsure what they were thinking and who all are advising…

I was not aware Trello is considered a failure.

BitBucket and Hipchat, for sure.

OpsGenie, until the really bad way they handled an outage last year, it was, sometimes begrudgingly, widely used, recommended sometimes even.

Trello, on the other hand, seems like what everyone wants to use but no organization seems to want to let people use. Everyone that uses Trello seemingly, likes it

Re: Atlassian Acquires Loom

#339

Post by lmeyerov »

birken wrote: post #335
lmeyerov wrote: post #334

Earlier quoted context omitted.

yes, this is very much stage-specific by the time of these $100M+ rounds for $1B unicorns to hire a lot of people, the 90% discount is long gone

It might not be a 90% discount but it still will be a >50% discount

for companies raising 9 figure later-stage rounds? that's not obvious to me

and relevant to this case, often the investor will do a higher valuation (artificially minting a unicorn etc) for optics/vanity reasons, which eats an additional 1+ years of future growth, eliminating the relevance of a discount here

and for folks who many not have followed terms above: investors get preferred shares, with rights over these discounted common shares. These include things like veto rights over acquisitions, first money out ("if $200M raised, no one else sees any $ until that $200M is paid back"), and for high-valuation unicorn rounds, often something like a participation multiple ("guaranteed extra $100M profit, so no one sees anything till $300M paid"), high interest rate on convertible debt portions, etc. So beyond the obvious dilution hit of new investors, there are a lot of these gotchas that trade a bigger bank account for heightened exit value risks to employees.

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