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I sold Baremetrics

baremetrics.com

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Re: I sold Baremetrics

#171

Post by cloverich »

remote_phone wrote: post #118
gadders wrote: post #55

Earlier quoted context omitted.

The founder usually carries the majority of the risk as well.

It sounds like he put in no money of his own. He would not have made $3.7M without the hard work of his employees. And yet when it came down to it, he took almost all the money for himself.

If he worked for free, he _did_ put in money of his own. So it depends on what his salary cut was, and for how long. I've been thinking of starting a company for ages, but there's no escaping this fact -- I have to give up a substantial amount of money, and the most likely scenario is my company won't take off (much less make a profit, and even less an exit). I agree employees should be compensated but ultimately, if they get a salary on day one, it is a very different calculation. I've worked as an early stage employee, and the salary cut I took was ~30% for ~1 year. I may get a payout from that, perhaps 1-5x and to me that seems a pretty reasonable balance. ¯\_(ツ)_/¯

Re: I sold Baremetrics

#172

Post by Topgamer7 »

pc86 wrote: post #12

I know there's a trope about the naive founder getting screwed by shifty-eyed VC sharks, but it really sounds like Josh screwed his investors and employees here. > I wanted them to at least get their money back, but ultimately, for the $4m purchase price to work, we’d need to ask them to walk on their [$800,000] investment. He clearly didn't want it very badly, then. Nearly $3 million wasn't enough? That's about $420…

I'm not the most financially savvy person. And I am not an attentive follower of Baremetrics. But wouldn't the investors have been getting dividend returns quarterly all along since their investment was made?

Re: I sold Baremetrics

#173

Post by realbarack »

mooreds wrote: post #144
hn_throwaway_99 wrote: post #124

Earlier quoted context omitted.

But I'm making the argument that most of the bullet points in your list make no sense to consider because the remuneration at FAANGs is usually so much more, and that money would then give you the freedom to do what you want. I mean "how much time they want to spend interviewing/prepping"?? If a FAANG will average 2-3x payout, it would be insane not to be willing to prep for literally months if that made the differen…

Is someone making 450k in SV (renting a home, commuting hours each way, having to fly to see family) really living a better life than someone making 150k in, say Birmingham? Where they could work from home, live close to family, have a bike commute? It's not for me (or you) to decide for others, however :) . I just think there are many more dimensions than raw salary to consider. You could work like a dog for 5 years…

I won't weigh in on your "is it better" question, but if you make 450k a year in the Bay Area you definitely do not need to commute hours each way and you can probably afford to buy a home if you want.

Re: I sold Baremetrics

#174

Post by falcolas »

dbbk wrote: post #94
falcolas wrote: post #36

Earlier quoted context omitted.

$80k for how many years of work? Unless it’s one, I’m with the parent. I’m sure it’s all legal and ‘equitable’ according to the terms, but that’s peanuts of a return for somewhere between 4 and 7 years of work (based off a typical vesting schedule).

I assume they also got paid in that time? You're making it sound like they've made a big sacrifice to (only) receive $80K at the end.

So was the founder. SV level salary, per their words.

And, as I've said elsewhere, startup salaries are rarely on par with the industry average. Working at a startup is typically sold as "you'll be paid less, but if we sell you'll get a payout to make up for it".

Re: I sold Baremetrics

#175

Post by RedditKon »

skrebbel wrote: post #97

At the time I write this comment, half my screen is full of people calling Josh not so nice things. Folks, this is a founder who's openly sharing the kinds of things we usually keep hidden. I doubt there's been a startup exit in the last decade where a healthy skeptical HN'er couldn't find some wrongs being done, if the details had been available. It's extremely hard to get everything right, from every perspective. T…

I feel the same way, especially in regards to everyone opining on the investors taking a markdown. For context, it was General Catalyst and Bessemer.

- General Catalyst: $2.5B+ in Assets Under Management

- Bessemer: $4B in Assets Under Management

DISCLAIMER: If you take venture capital, you should obviously always do it as a responsible fiduciary of both the company and the capital.

With that said, I'm positive both of those firms will be fine. They're looking for 100x returns, a $400k write-down from a seed investment is nothing. If anything, it's worth doing that on the off-chance Josh goes on to create the next Uber or Salesforce and they want to invest again. SV runs on relationships.

Re: I sold Baremetrics

#176

Post by TomVDB »

mooreds wrote: post #144
hn_throwaway_99 wrote: post #124

Earlier quoted context omitted.

But I'm making the argument that most of the bullet points in your list make no sense to consider because the remuneration at FAANGs is usually so much more, and that money would then give you the freedom to do what you want. I mean "how much time they want to spend interviewing/prepping"?? If a FAANG will average 2-3x payout, it would be insane not to be willing to prep for literally months if that made the differen…

Is someone making 450k in SV (renting a home, commuting hours each way, having to fly to see family) really living a better life than someone making 150k in, say Birmingham? Where they could work from home, live close to family, have a bike commute? It's not for me (or you) to decide for others, however :) . I just think there are many more dimensions than raw salary to consider. You could work like a dog for 5 years…

Somebody who makes $450k can easily buy a home in the Bay Area that’s close to any FAANG campus, and bike to work, and in many cases, not work like a dog.

(A $1.5M mortgage is around $6k per month today.)

And at the end of the year, even if what’s left over in terms of percentage of income is the same (and it’s usually not, because many COL expenses don’t scale linearly with the cost of housing), you end up with more in the bank to send your kid to college or to retire.

Re: I sold Baremetrics

#177

Post by goodGood00 »

pc86 wrote: post #12

I know there's a trope about the naive founder getting screwed by shifty-eyed VC sharks, but it really sounds like Josh screwed his investors and employees here. > I wanted them to at least get their money back, but ultimately, for the $4m purchase price to work, we’d need to ask them to walk on their [$800,000] investment. He clearly didn't want it very badly, then. Nearly $3 million wasn't enough? That's about $420…

I don’t even know you and this post left a bad taste in my mouth personally.

Good thing you left your LinkedIn.

Other people aren’t obligated to live up to the image you hold of yourself.

This has been happening every day in America for decades.

I have little sympathy for App Corps everywhere realizing the same thing other industries have dealt with the whole time; your society doesn’t really care.

Welcome to free market speculative economics full of disruptive behaviors.

Oh what you thought the disruption was just over here? Looks like you got disrupted in an unconsidered way.

Re: I sold Baremetrics

#178

Post by user5994461 »

jcims wrote: post #168
skrebbel wrote: post #97

At the time I write this comment, half my screen is full of people calling Josh not so nice things. Folks, this is a founder who's openly sharing the kinds of things we usually keep hidden. I doubt there's been a startup exit in the last decade where a healthy skeptical HN'er couldn't find some wrongs being done, if the details had been available. It's extremely hard to get everything right, from every perspective. T…

Same thing happens with GitLab somewhat regularly. I don't know of any company that operates with that level of transparency and somehow a select set of folks can't seem to control themselves when supplied with a reason to air their grievance.

GitLab is a poster child of why companies don't publish any details.

Deleted the production database and customer data? You could apologize and move on. There should have been backups to restore from but clearly there weren't.

The gitlab way: Go in great details about how there is no automated backup and the last one that was done manually 3 months ago doesn't work... and how there was no testing/staging environment to try the change before production... and how any intern could delete it the same way by accident on their first day.

There's a reason companies don't publish gory details and internal discussion. At best there's nothing to gain from it and at worst it's highlighting incompetence and wrongdoing.

Re: I sold Baremetrics

#179

Post by rpsw »

bluedevil2k wrote: post #68
ianhawes wrote: post #34

>What I walk away with: $3,700,000 in cash >practically speaking, never need to work again Yikes, does someone want to tell him?

I'm with OP - $3.7M seems like a lot, but it really isn't enough to retire on. I assume he'll need to pay taxes on that, a 20% long-term capital gains tax. Brings it down to about $3M. Being generous and giving him 3.5% return (real return) a year in fixed income, that's only $105,000 a year in income, which he'll need to pay taxes on as well. He'll net out around $85k a year.

$85k budget a year without touching the $3m principal. I'd say he'd have a great chance of never needing to work again if he wishes, especially if he already has some retirement savings and/or assets such as housing.

Re: I sold Baremetrics

#180

Post by heipei »

andygcook wrote: post #85

@shpigford - Are you able to exempt your exit from capital gains under the QSBS tax laws? For those curious, more here: https://www.brownadvisory.com/us/qsbs-tax-exemption-valuable...

I'm assuming he held his shares through his own holding company.
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