Union Square gets 5,000% return on Tumblr • Hacker News Board

Re: Union Square gets 5,000% return on Tumblr

#51

Post by orangethirty » Wed, May 22, 2013, 4:44 AM UTC

patio11 wrote: post #23

jlgreco wrote: post #10

Earlier quoted context omitted.

The notion of 30 year old websites seems incredibly alien to me, but I suppose there is no real reason why that should never happen.

I empathize with that feeling, but would point out that if they were people, Intel would be getting yearly prostate screenings, Accenture would be retired, and Nintendo would be dead.

Google would be entering puberty, Microsoft and Apple would be bowling buddies, Yahoo would be a college student with a major in a dead language, YC would be the guy everyone wants to be friends, eBay would be a flea market sales person, and Craigslist would be one of those 2-for-1 prostitutes. (:

Re: Union Square gets 5,000% return on Tumblr

#52

Post by jbooth » Wed, May 22, 2013, 5:04 AM UTC

patio11 wrote: post #23

jlgreco wrote: post #10

Earlier quoted context omitted.

The notion of 30 year old websites seems incredibly alien to me, but I suppose there is no real reason why that should never happen.

I empathize with that feeling, but would point out that if they were people, Intel would be getting yearly prostate screenings, Accenture would be retired, and Nintendo would be dead.

Accenture would be in the witness protection program or jail.

Re: Union Square gets 5,000% return on Tumblr

#53

Post by rdl » Wed, May 22, 2013, 5:07 AM UTC

orangethirty wrote: post #50

fredwilson wrote: post #36

Earlier quoted context omitted.

I take it personally when people write irresponsible garbage about our portfolio companies. I care about them and their teams a lot. Making money is nice but being a supportive and good investor is a lot better

To me, you are the first actual investor that has said something like this. My image of investors in general is tarnished from past dealings. Yet, I want to believe. I want to believe that there are investors out there who simply care about the people, about the goals. Who do not see an investment as merely a financial transaction, but as an addition to their own team. If this is really you, then congratulations. Its…

Most of the top tier investors are pretty consistent with this message. Ironically, they're also the ones who get approximately all the returns, probably as much because the best entrepreneurs would prefer to work with them vs. mediocre investors, as much as because of the direct value these investors add.

Re: Union Square gets 5,000% return on Tumblr

#54

Post by rdl » Wed, May 22, 2013, 5:09 AM UTC

jlgreco wrote: post #10

sgpl wrote: post #9

According to PrivCo [ http://goo.gl/AW7GD ], here are all the payouts of the 1,100 mn: $286 mn: USV $231 mn: Spark Capital $253 mn: David Karp $176 mn: Sequoia $88 mn: Greylock, Insight Ventures, DFJ $66 mn: Employees (6% of the 1,100 mn) The math adds up to 71% of Tumblr being owned by VCs. Also Bloomberg reported that David Karp asked for as much stock as Yahoo would give him, because he sees himself working on Tum…

The notion of 30 year old websites seems incredibly alien to me, but I suppose there is no real reason why that should never happen.

I'm sure people once felt the same way about the notion of "cars and planes made by companies and not gentlemen-adventurers".

Re: Union Square gets 5,000% return on Tumblr

#55

Post by orangethirty » Wed, May 22, 2013, 5:34 AM UTC

rdl wrote: post #53

orangethirty wrote: post #50

Earlier quoted context omitted.

To me, you are the first actual investor that has said something like this. My image of investors in general is tarnished from past dealings. Yet, I want to believe. I want to believe that there are investors out there who simply care about the people, about the goals. Who do not see an investment as merely a financial transaction, but as an addition to their own team. If this is really you, then congratulations. Its…

Most of the top tier investors are pretty consistent with this message. Ironically, they're also the ones who get approximately all the returns, probably as much because the best entrepreneurs would prefer to work with them vs. mediocre investors, as much as because of the direct value these investors add.

I generally don't design or build with outside investment in mind. Given how I've seen how bad investors make good teams crumble in short periods of time. But, I would actually consider working with people who see value in me and my team, rather than only focus on the bottom line. May you mention other investors who share this same attitude?

Re: Union Square gets 5,000% return on Tumblr

#56

Post by 7Figures2Commas » Wed, May 22, 2013, 6:33 AM UTC

krschultz wrote: post #19

larrys wrote: post #15

Earlier quoted context omitted.

"the rest of the 178 employees will each receive $371,000." Interesting to keep in mind for anyone working for a startup as a metric. You work and have a chance, if the idea hits (to the tune of 1 billion) of making low to mid 6 figures. $371k is certainly nice but considering the amount of startups that not only don't succeed but don't succeed to the extent that Tumblr did ...

That said, being the 41st person at a startup is not exactly risky and I wouldn't expect you to be taking a below market salary in exchange for shares at that point. So market salary + $371k bonus isn't a bad deal.

> So market salary + $371k bonus isn't a bad deal.

It isn't necessarily a great deal either though. Somebody making market salary at a startup in one of the most expensive cities in the world may very well be saving less than somebody grossing a considerable amount less in a less expensive area, and after taxes that $371,000 bonus isn't a whole lot more than the base salary for a first year associate attorney at a major law firm in New York.

So while I wouldn't call the outcome here disappointing for anybody involved, I think it does highlight the generally poor economics of equity for startup employees: even when your company hits a grand slam, the windfall is rarely a short cut to the type of wealth that is frequently achieved by starting a successful small business or going into a lucrative profession.

Re: Union Square gets 5,000% return on Tumblr

#57

Post by rmc » Wed, May 22, 2013, 9:17 AM UTC

jlgreco wrote: post #10

sgpl wrote: post #9

According to PrivCo [ http://goo.gl/AW7GD ], here are all the payouts of the 1,100 mn: $286 mn: USV $231 mn: Spark Capital $253 mn: David Karp $176 mn: Sequoia $88 mn: Greylock, Insight Ventures, DFJ $66 mn: Employees (6% of the 1,100 mn) The math adds up to 71% of Tumblr being owned by VCs. Also Bloomberg reported that David Karp asked for as much stock as Yahoo would give him, because he sees himself working on Tum…

The notion of 30 year old websites seems incredibly alien to me, but I suppose there is no real reason why that should never happen.

30 year tech companies do exist though. Apple & Microsoft for example.

Re: Union Square gets 5,000% return on Tumblr

#58

Post by dragonikola » Wed, May 22, 2013, 9:19 AM UTC

pkmehta wrote: post #41

SilconValleyVC wrote: post #32

Earlier quoted context omitted.

The Series A USV invested in was only $775,000 and was at $1/share according to privco and confirmed by docs I've seen. So how much did USV invest? Obviously Tumblr sold for over $200/share, so please do the math and show what's off? Is it a few percent, in which case what does that matter when you've made 5,000%? You should be proud of that! As a VC I'm envious Fred. But I've found the privco data reliable (but I'm…

SiliconValleyVC - this account has to be the worst attempt at astro-turfing I've seen in a while from a company employee or founder. Does anyone talk like this about a vendor (much less a data company) -- "I respect PrivCo from my working with their remarkably accurate data." Right right. You're a SiliconValleyVC whose submission history is 2 privco articles. And your comment history references PrivCo multiple times…

He even remembers the precise wording of that article that he supposedly read months ago

>PrivCo said forusquare will be out of business by year's end absent raising "massively dilutive" funding.

So he either remembered the precise wording, or he cares so much about defending them that he went out of his way to dig it up and re-read it.

Re: Union Square gets 5,000% return on Tumblr

#59

Post by fredwilson » Wed, May 22, 2013, 9:43 AM UTC

rdl wrote: post #53

orangethirty wrote: post #50

Earlier quoted context omitted.

To me, you are the first actual investor that has said something like this. My image of investors in general is tarnished from past dealings. Yet, I want to believe. I want to believe that there are investors out there who simply care about the people, about the goals. Who do not see an investment as merely a financial transaction, but as an addition to their own team. If this is really you, then congratulations. Its…

Most of the top tier investors are pretty consistent with this message. Ironically, they're also the ones who get approximately all the returns, probably as much because the best entrepreneurs would prefer to work with them vs. mediocre investors, as much as because of the direct value these investors add.

it is easier to behave properly when you have a big pile of chips in front of you. when you don't have any chips, it is tougher. that's why the best get better and the worst get worse.

Re: Union Square gets 5,000% return on Tumblr

#60

Post by fredwilson » Wed, May 22, 2013, 9:44 AM UTC

orangethirty wrote: post #50

fredwilson wrote: post #36

Earlier quoted context omitted.

I take it personally when people write irresponsible garbage about our portfolio companies. I care about them and their teams a lot. Making money is nice but being a supportive and good investor is a lot better

To me, you are the first actual investor that has said something like this. My image of investors in general is tarnished from past dealings. Yet, I want to believe. I want to believe that there are investors out there who simply care about the people, about the goals. Who do not see an investment as merely a financial transaction, but as an addition to their own team. If this is really you, then congratulations. Its…

there are many of us in VC who approach things this way. they are the ones we like to work with the most. if you look at who we work with often, you can reverse engineer the list.