Unlike Landing.ai and C3.ai, Element.ai was lacking of a solid go-to-market strategy from day 1.
Element AI sold for $230M, as founders saw value mostly wiped out: document
11–20 of 59 posts
Re: Element AI sold for $230M, as founders saw value mostly wiped out: document
#12Paywall copy from reddit https://old.reddit.com/r/MachineLearning/comments/khin4c/n_m...
You're the salt of the Earth
Re: Element AI sold for $230M, as founders saw value mostly wiped out: document
#13Unlike Landing.ai and C3.ai, Element.ai was lacking of a solid go-to-market strategy from day 1.
I worked at Element AI, and that was true from the inside to an extent that was borderline terrifying. On orientation we were told that EAI's strategy was to hire as many smart individuals as possible. There was no focus on delivering an actual product, it was demo after demo of semi-impressive DL models.
It makes me sad thinking of all the brilliant colleagues I had that were simply wasting their talent.
Re: Element AI sold for $230M, as founders saw value mostly wiped out: document
#14The actual title is "Element AI sold for $230-million as founders saw value mostly wiped out". This is an important difference, since the submitted title here implies they were entirely wiped out. It looks like this company raised ~$250M, and sold for $230M. This isn't any sort of nefarious "founders got wiped out"; they sold for less money than they raised and this is the typical outcome in that situation. Also, fro…
Yeah this is basically part of the deal when you take VC and raise hundreds of millions. Don't expect much in return if you fail to deliver, or really unless you skyrocket at least 10x as expected in such arrangements.
This is the sort of middle ground where it's not a complete disaster but some value is still generated out of the entity.
Re: Element AI sold for $230M, as founders saw value mostly wiped out: document
#15Anybody familiar with the matter knows if Bengio scaled down his academic duties while raising money for Element AI?
Re: Element AI sold for $230M, as founders saw value mostly wiped out: document
#16The actual title is "Element AI sold for $230-million as founders saw value mostly wiped out". This is an important difference, since the submitted title here implies they were entirely wiped out. It looks like this company raised ~$250M, and sold for $230M. This isn't any sort of nefarious "founders got wiped out"; they sold for less money than they raised and this is the typical outcome in that situation. Also, fro…
It also says ServiceNow agreed to hiring many of the employees in this deal so it’s not that catastrophic. Although yes their options aren’t even worth the paper they were printed on.
Re: Element AI sold for $230M, as founders saw value mostly wiped out: document
#17I don't know anything about this company. But I work at FAANG as an ML scientist and spent about 3 months this year working on a research project that demonstrated big performance improvements of a new tech. It got enough interest that it led to a new project that brings this to production. This has led to countless headaches. The skills needed to solve these challenges are very different. My more academically minded…
Really good insight. When I put engineering job posts up, we get loads of PhD applications...a staggering amount. And all of these people look great on paper. It’s only when you start talking to them off script that you understand a career in academia has radically different incentive pressures than the private sector. We end up passing on most, not because they aren’t brilliant, but because they’re very one dimensional, which is what suits academia.
Re: Element AI sold for $230M, as founders saw value mostly wiped out: document
#18It’s funny to see this around the same time as this other thread where people are going through so much mental gymnastics to avoid obvious conclusions of how horrible it is to work for a startup,
Re: Element AI sold for $230M, as founders saw value mostly wiped out: document
#19The actual title is "Element AI sold for $230-million as founders saw value mostly wiped out". This is an important difference, since the submitted title here implies they were entirely wiped out. It looks like this company raised ~$250M, and sold for $230M. This isn't any sort of nefarious "founders got wiped out"; they sold for less money than they raised and this is the typical outcome in that situation. Also, fro…
If preferred shareholders gain control, common shareholders are screwed (as in zero value). I speak from personal experience. In our case, the founders and top executives absolutely went down with the ship and lost everything.
Briefly, cash was needed and investors were found at an relatively early point. The agreement set a value (V) under which the proceeds would benefit the preferred shareholders (the new investors). After the agreement was signed, the new investors joined forces with another investor achieving control. A new entity was set up, controlled by the investors, and they used their control to force the sale of the company at V, instantly destroying all common shareholder value.
All of this was announced (in a rather gloating manner) by the new head of the company. "You report to me now", basically.
This did not sit well with the staff, who had been working hard for a while. I walked that day, and within a few days the entire engineering team did as well.
For their $5 million, they got office desks, a bunch of PCs, and some half-built software they had no idea what to do with.
I suppose that did not work out particularly well for anybody ;)
Re: Element AI sold for $230M, as founders saw value mostly wiped out: document
#20Anybody familiar with the matter knows if Bengio scaled down his academic duties while raising money for Element AI?
He did scale them down, but he forgot to subtract the mean first which is why his duties were biased and the outcome was not efficient.