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I sold Baremetrics

baremetrics.com

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Re: I sold Baremetrics

#21

Post by pc86 »

dimva wrote: post #10

$3.7 million sounds like a lot of money, but he could have earned more than that over 7 years if he just took a mid-level job at a FAMANG company. EDIT: saw that the founder lives in Birmingham, Alabama. So yes, $3.7 million IS a lot of money.

It averages out to $420k/yr. There's this sentiment on HN that "all you have to do" is get a job at a big tech company and you'll make a million dollars a year. It's idiotic, and not true. Yes, there are people who make $500k+ writing code in a cubicle for 40 hours a week. They are the vast, vast, vast minority compared to the people a) making $100-200k doing the same thing; b) making that $500k+ doing everything but writing code.

Unless you're doing infrastructure stuff at Netflix, ad work at FB or Google, or some high level stuff at Microsoft you're not making half a million a year, and you're not doing it at a mid-level anything, anywhere.

Re: I sold Baremetrics

#23

Post by ccmcarey »

Shpigford wrote: post #16
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…

You're making a veritable crap-ton of assumptions here. Happy to talk about specific concerns, but not if you're going in to this with guns blazing looking for a witch to burn.

I'm curious how it works from a technical standpoint. If they invest, do they not own shares of the company, and then during the sale the shares are sold, did they just gift the shares back to you personally? Does that have tax implications?

Re: I sold Baremetrics

#24

Post by high_derivative »

Shpigford wrote: post #16
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…

You're making a veritable crap-ton of assumptions here. Happy to talk about specific concerns, but not if you're going in to this with guns blazing looking for a witch to burn.

So what did employees get?

Re: I sold Baremetrics

#25

Post by Shpigford »

ccmcarey wrote: post #23
Shpigford wrote: post #16

Earlier quoted context omitted.

You're making a veritable crap-ton of assumptions here. Happy to talk about specific concerns, but not if you're going in to this with guns blazing looking for a witch to burn.

I'm curious how it works from a technical standpoint. If they invest, do they not own shares of the company, and then during the sale the shares are sold, did they just gift the shares back to you personally? Does that have tax implications?

Investment vehicle was a SAFE. They basically cancelled the SAFE as part of the deal. We've had carryover losses for years, so from a tax perspective, there was no hit on either side.

Re: I sold Baremetrics

#26

Post by pc86 »

Shpigford wrote: post #16
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…

You're making a veritable crap-ton of assumptions here. Happy to talk about specific concerns, but not if you're going in to this with guns blazing looking for a witch to burn.

Now that you mention it, you're right, maybe some of that extra $300k went to the employees? I don't know because I wasn't in the room. I'm curious how much money employees got, and why $3.7 million was enough when $2.9 wasn't.

Re: I sold Baremetrics

#27

Post by mattmanser »

Shpigford wrote: post #18
mattmanser wrote: post #14

Earlier quoted context omitted.

That assumes he took no salary or dividends for 7 years, which seems highly unlikely given their ARR.

Right. I've been paying myself $100-150k a year for most of that.

dimva also has his sums very wrong, 3.7 mill over 7 years is over 500k per year, you won't get that at any FAANG for a mid-level position.

Re: I sold Baremetrics

#28

Post by ccmcarey »

Shpigford wrote: post #25
ccmcarey wrote: post #23

Earlier quoted context omitted.

I'm curious how it works from a technical standpoint. If they invest, do they not own shares of the company, and then during the sale the shares are sold, did they just gift the shares back to you personally? Does that have tax implications?

Investment vehicle was a SAFE. They basically cancelled the SAFE as part of the deal. We've had carryover losses for years, so from a tax perspective, there was no hit on either side.

Makes sense, thanks!

Re: I sold Baremetrics

#29

Post by Shpigford »

high_derivative wrote: post #24
Shpigford wrote: post #16

Earlier quoted context omitted.

You're making a veritable crap-ton of assumptions here. Happy to talk about specific concerns, but not if you're going in to this with guns blazing looking for a witch to burn.

So what did employees get?

Depends on the employees and when they joined and if they exercised stock options or not. Big range from a few thousand to over $80,000.

Re: I sold Baremetrics

#30

Post by Shpigford »

pc86 wrote: post #26
Shpigford wrote: post #16

Earlier quoted context omitted.

You're making a veritable crap-ton of assumptions here. Happy to talk about specific concerns, but not if you're going in to this with guns blazing looking for a witch to burn.

Now that you mention it, you're right, maybe some of that extra $300k went to the employees? I don't know because I wasn't in the room. I'm curious how much money employees got, and why $3.7 million was enough when $2.9 wasn't.

That entire $300k went to employees.

As for $3.7 vs $2.9...that was basically the number that, to oversimplify, would roughly give the outcome I wanted for "retirement" when it comes to investment interest over the next 50 years.

Basically, it's the number I felt comfortable with to not instantly feel like I needed to get back to work in a few years.

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