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Sprinklr Acquires GetSatisfaction, Founders Get Nothing

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Re: Sprinklr Acquires GetSatisfaction, Founders Get Nothing

#121

Post by shadowcaster »

SwellJoe wrote: post #42

I have very limited knowledge of this situation, but, I'm gonna pile on anyway: With that kind of money raised, the founders didn't get "nothing". They got a salary, probably a decent one, for however long they were running the thing. Which is more than many startup founders get out of businesses that fail. If they don't have personal debt, or didn't lose relationships or friendships, they came out ahead of many star…

"They got a salary, probably a decent one, for however long they were running the thing." - I want to second this. I worked for a startup that the C level's made huge bucks (we were paid really well too) and they would wine/dine on the companies $$ all the time. They sold the company for a little more then the funding they got, but spun a new company off where investors got little and they cashed out.

Re: Sprinklr Acquires GetSatisfaction, Founders Get Nothing

#122

Post by look_lookatme »

rebelidealist wrote: post #101
MCRed wrote: post #82

Earlier quoted context omitted.

VCs aren't assholes, generally, but their standard terms are a bad deal for founders, generally. I've thought about this a lot over the past 25 years. In the past I've seen VCs do really bad things (like force decisions that set the company back 18 months bad.) The problem is, when you get a "good" VC that doesn't force bad decisions on you ,the cost of the money, mostly in deal terms, is too damn high. And when you…

Many people don't realize that 37Signals / Basecamp is a multi-billion dollar business. https://medium.com/@hungrycharles/basecamp-the-small-bootstr...

Additionally, they had the opportunity to capitalize on Campfire in a way that they could have closed the market for realtime collaboration before Slack. Obviously Slack is a superior product (and given 37signals opinionated product philosophy I don't think they would have ever built something so comprehensive) but still... they had a 7 year head start on Slack. A lot of orgs used Campfire every day, and probably plenty still do.

But I appreciate their commitment to focusing on one thing.

Re: Sprinklr Acquires GetSatisfaction, Founders Get Nothing

#123

Post by slowernet »

rebelidealist wrote: post #101
MCRed wrote: post #82

Earlier quoted context omitted.

VCs aren't assholes, generally, but their standard terms are a bad deal for founders, generally. I've thought about this a lot over the past 25 years. In the past I've seen VCs do really bad things (like force decisions that set the company back 18 months bad.) The problem is, when you get a "good" VC that doesn't force bad decisions on you ,the cost of the money, mostly in deal terms, is too damn high. And when you…

Many people don't realize that 37Signals / Basecamp is a multi-billion dollar business. https://medium.com/@hungrycharles/basecamp-the-small-bootstr...

Basecamp's revenue and efficiency is of course impressive, but I'm not sure a multiple like Atlassian's would apply. Investors could reasonably assume (or know, if they're privy to their plans) that Atlassian is planning to use those 1100 employees to go after a number of markets, whereas Basecamp has shown their preference for focus and managed growth.

Re: Sprinklr Acquires GetSatisfaction, Founders Get Nothing

#124

Post by RobAley »

KayEss wrote: post #88
prostoalex wrote: post #26

Earlier quoted context omitted.

I forgot about the debt holders. So if there was any debt (including un-converted convertible notes), the pecking order is: 1) Debt holders 2) Most senior shareholders and their liquidation preference 3) Less senior shareholders and their liquidation preference ... 99) Common stock holders This is actually to align the founder incentives in shooting for a big exit. Insert any other order of preferences, and the found…

Number one preference is the tax man isn't it? At least in the UK, he always gets paid first.

That's not been true for a long time. The only "preferential creditor" in the UK now are employees, HMRC take their chances with all other debtors.

Re: Sprinklr Acquires GetSatisfaction, Founders Get Nothing

#125

Post by dwhly »

Rambunctious wrote: post #99
MCRed wrote: post #82

Earlier quoted context omitted.

VCs aren't assholes, generally, but their standard terms are a bad deal for founders, generally. I've thought about this a lot over the past 25 years. In the past I've seen VCs do really bad things (like force decisions that set the company back 18 months bad.) The problem is, when you get a "good" VC that doesn't force bad decisions on you ,the cost of the money, mostly in deal terms, is too damn high. And when you…

> Don't even get me started on founders vesting their shares. As an average Joe angel (not blessed with any inherited wealth), I personally think it's fair ask to ask founders to vest a "majority" of their shares. IMHO, if angels take 10% for a company in its infancy and leave founders with 90% vested equity, there is simply too much risk if one of the founders decides to leave! Especially so when the business itself…

This.

As someone who started the first travel site on the web (GetThere) and built it to 600 employees, an IPO and later sale to Sabre, and who debated this with my co-founders and myself, there is a most definitely a happy medium (we started with 18 months of vesting on a 48 month plan).

If founders start 100% vested then the pre-money will simply be a different calculation, and founders will earn additional shares to continue to provide incentive post-funding. Don't delude yourself that somehow your equity will provide sufficient incentive for you to continue to perform. This might be somewhat true in startups with one founder, but it's considerably less true when there are 2 or 3. And it's also protection for you as a founder. Why let one of your co-founders be able to cut out early on and get the same deal you did when you still have to put in the time in order for the opportunity to truly prove its potential. It's important for the founders to continue to vest-- and also, when things take longer than 4 years, as they did for us, more shares are appropriate for founders that remain essential to the business.

Re: Sprinklr Acquires GetSatisfaction, Founders Get Nothing

#126

Post by myth_buster »

reustle wrote: post #37
staunch wrote: post #19

The company tanked after having elected to raise $20M over 5 rounds, for what should have been a very profitable lifestyle business. The lesson is not to raise VC money for a business where it does not make sense.

He also has a relevant tweet deeper in the thread > Taking VC is like getting the world’s worst boss: Shitload of opinions, undue level of influence, never actually shows up for work. https://twitter.com/monstro/status/587413328055635968

Is there a site like RateMyProfessor for VCs?

Re: Sprinklr Acquires GetSatisfaction, Founders Get Nothing

#127

Post by myth_buster »

neil_s wrote: post #114
sharkweek wrote: post #47

This is pretty common. When startups don't sell for above their valuations, the investors are going to get their money back first (and in varying cases more, depending on liquidation preferences). Pulled GetSatisfaction's tables from PitchBook, take a look at their B round: http://i.imgur.com/zUzDrFp.png Post valuation at over $50M - no data yet on the amount of the acquisition, but if it was equal to that or less (o…

The acquirer, Sprinklr, is funding multiple acquisitions out of their recently raised $46M, so it's fairly certain that the amount of this acquisition was less than $50M

What about stocks?

Re: Sprinklr Acquires GetSatisfaction, Founders Get Nothing

#128

Post by orenbarzilai »

SwellJoe wrote: post #42

I have very limited knowledge of this situation, but, I'm gonna pile on anyway: With that kind of money raised, the founders didn't get "nothing". They got a salary, probably a decent one, for however long they were running the thing. Which is more than many startup founders get out of businesses that fail. If they don't have personal debt, or didn't lose relationships or friendships, they came out ahead of many star…

"With that kind of money raised, the founders didn't get "nothing". They got a salary, probably a decent one, for however long they were running the thing. Which is more than many startup founders get out of businesses that fail. If they don't have personal debt, or didn't lose relationships or friendships, they came out ahead of many startup founders who started a business that failed."

Well, you should always consider the alternative cost. I don't know the founders but I can assume that if they would have work somewhere else they had much higher salary/ benefits etc

Re: Sprinklr Acquires GetSatisfaction, Founders Get Nothing

#129

Post by mcguire »

danbmil99 wrote: post #86
MCRed wrote: post #82

Earlier quoted context omitted.

VCs aren't assholes, generally, but their standard terms are a bad deal for founders, generally. I've thought about this a lot over the past 25 years. In the past I've seen VCs do really bad things (like force decisions that set the company back 18 months bad.) The problem is, when you get a "good" VC that doesn't force bad decisions on you ,the cost of the money, mostly in deal terms, is too damn high. And when you…

Nicely done. One problem that arises with the bootstrap-off-revenue model (assuming of course you are lucky enough to find product/market fit quickly, before you run through your seed money) is that you become vulnerable to company B that was willing to take crappy VC $$$ and is now able to kick your ass on price, right down to the freemium, eyeballs-are-value goose-egg giveaway. Free markets are always prone to a ra…

"...you become vulnerable to company B that was willing to take crappy VC $$$ and is now able to kick your ass on price, right down to the freemium, eyeballs-are-value goose-egg giveaway."

If that's physically possible, if price is the differentiator, you probably don't need to be in the business anyway. (Now, I'm not saying that you're wrong, in most cases, but....)

Re: Sprinklr Acquires GetSatisfaction, Founders Get Nothing

#130

Post by danreedx86 »

myth_buster wrote: post #126
reustle wrote: post #37

Earlier quoted context omitted.

He also has a relevant tweet deeper in the thread > Taking VC is like getting the world’s worst boss: Shitload of opinions, undue level of influence, never actually shows up for work. https://twitter.com/monstro/status/587413328055635968

Is there a site like RateMyProfessor for VCs?

thefunded maybe?
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