Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Venture-capital infusions shrank Box founders’ stakes, ignited strife

wsj.com

Post reply on HN
Print view View original

21–30 of 49 posts

Re: Venture-capital infusions shrank Box founders’ stakes, ignited strife

#21

Post by kzhahou »

> Aaron Levie and Dylan Smith are worth more than $100 million combined after turning the cloud software firm they started in a Berkeley, Calif., garage into Box Inc., with 1,200 employees and expected revenue of $285 million this year. ...But getting there took 10 years.

This illustrates very well the disparity between founder and non-founder equity. It's considered a negative that Levie and Smith got only $100 million combined. They're not Sergey-rich, but it's still fuck-you retire-early start-a-foundation become-an-investor money for each of them.

Meanwhile, given that the sum of non-founder equity (i.e., all employees combined) typically adds up to less than the founders', you've got at most $100 million to spread over 1200 employees. Employee number 1 might have a couple million dollars bonus from his 10 years, but it'll go down quickly from there for everyone after the first few. Where's the WSJ article on them, and the thousands of others who are never written about when silicon valley companies go public? The ones who joined a company early, or when it was in the red, or under pressure from all sides, and helped it grow and succeed... and they walk away still not being able to afford a house in Mountain View, while their founders pick out colors for their Ferraris?

Re: Venture-capital infusions shrank Box founders’ stakes, ignited strife

#22

Post by ricardonunez »

gkoberger wrote: post #10
SilasX wrote: post #8

Earlier quoted context omitted.

If that's failure, I don't want to win.

For the record, my point was that Aaron is anything but a failure, and all the press and people saying/implying this upset me.

I see your point, but I'm sure for their families, friends, VCs and all the people that really matter to them, they are successful and inspiring. Everybody else is not important.

Re: Venture-capital infusions shrank Box founders’ stakes, ignited strife

#23

Post by declan »

gkoberger wrote: post #5

Stories like this make me think it's almost not worth starting a company. Give 1,200 talented people an awesome place to work, be CEO of a company you truly enjoy leading, provide thousands of companies with a service that makes their lives easier, entertain 150k Twitter followers, make a bunch of your employees first-time millionaires, make millions for your investors, make yourself more money than you'll ever be ab…

This article was on the front page of the Wall Street Journal today. One thing that struck me when I read it this morning is that the headline is practically unrelated to the article: the word "rich" appears only in the article's 7th paragraph, and the bulk of the piece is pretty straightforward reporting on Box's fundraising efforts.

Box's market cap is approximately $2B. If the founders ended up with, say, $150M combined (the article says over $100M), it may be a relatively small slice -- but of a pretty big pie. I suspect 99.9999% of HN readers would be happy with the results that those two folks managed, and the fact that the company, in this post-Sarbox era, conducted a successful IPO. To put it in perspective, I'm not aware of a single YC-backed company that has had an IPO, though Dropbox seems a likely near-term candidate.

Re: Venture-capital infusions shrank Box founders’ stakes, ignited strife

#24

Post by kareemm »

kzhahou wrote: post #21

> Aaron Levie and Dylan Smith are worth more than $100 million combined after turning the cloud software firm they started in a Berkeley, Calif., garage into Box Inc., with 1,200 employees and expected revenue of $285 million this year. ...But getting there took 10 years. This illustrates very well the disparity between founder and non-founder equity. It's considered a negative that Levie and Smith got only $100 mill…

This is why being a super early employee is one of the worst deals in tech: marginally less risk than the founders, long hours, minimal equity, and likely below-market salary.

There are upsides, but outside of a few rare cases, I can't imagine joining a company at this stage.

Re: Venture-capital infusions shrank Box founders’ stakes, ignited strife

#25

Post by declan »

kzhahou wrote: post #21

> Aaron Levie and Dylan Smith are worth more than $100 million combined after turning the cloud software firm they started in a Berkeley, Calif., garage into Box Inc., with 1,200 employees and expected revenue of $285 million this year. ...But getting there took 10 years. This illustrates very well the disparity between founder and non-founder equity. It's considered a negative that Levie and Smith got only $100 mill…

Everything you say is correct. But on the other side of the ledger, the later Box employees presumably received market-rate salaries, and I suspect that many of the 1,200 employees are salespeople who may well bring in more in commission than the average software engineer makes in salary.

Also on the other side of the ledger, I could rewrite your comment to:

A founder at a tier 1 company might have millions of dollars in shares, but it'll go down quickly from there for everyone below the first tier. What about the founders at other companies who chose that route over safe, comfortable market-rate salaries and failed, or who received nothing after a down round with a high liquidation preference? Where's the WSJ article on them, and the thousands of others who are never written about when a handful of Silicon Valley companies a year go public? The ones who started a company, with their personal finances in the red, or under pressure from all sides, and helped it grow and succeed... and they walk away still not being able to afford a house in Mountain View, while early employees at Box or Facebook or Twitter pick out colors for their Ferraris?

Re: Venture-capital infusions shrank Box founders’ stakes, ignited strife

#26

Post by thom »

gkoberger wrote: post #5

Stories like this make me think it's almost not worth starting a company. Give 1,200 talented people an awesome place to work, be CEO of a company you truly enjoy leading, provide thousands of companies with a service that makes their lives easier, entertain 150k Twitter followers, make a bunch of your employees first-time millionaires, make millions for your investors, make yourself more money than you'll ever be ab…

If the only reason you're starting a company is to be considered a success, it's probably easier to just convince your parents love you in the first place.

Re: Venture-capital infusions shrank Box founders’ stakes, ignited strife

#27

Post by jtzhou »

> In May 2011, Citrix Systems Inc. offered to acquire Box for about $600 million, nearly triple the online storage company’s value in February.

> Draper Fisher Jurvetson, of Menlo Park, Calif., pressured Messrs. Levie and Smith to think long and hard about selling. The venture-capital firm stood to get $9 for every Box share it bought for 29 cents.

One reason one should hesitate about taking big-name VC funding is that you can get stuck in the "home run" mentality.

Re: Venture-capital infusions shrank Box founders’ stakes, ignited strife

#28

Post by dang »

declan wrote: post #23
gkoberger wrote: post #5

Stories like this make me think it's almost not worth starting a company. Give 1,200 talented people an awesome place to work, be CEO of a company you truly enjoy leading, provide thousands of companies with a service that makes their lives easier, entertain 150k Twitter followers, make a bunch of your employees first-time millionaires, make millions for your investors, make yourself more money than you'll ever be ab…

This article was on the front page of the Wall Street Journal today. One thing that struck me when I read it this morning is that the headline is practically unrelated to the article: the word "rich" appears only in the article's 7th paragraph, and the bulk of the piece is pretty straightforward reporting on Box's fundraising efforts. Box's market cap is approximately $2B. If the founders ended up with, say, $150M co…

We replaced the title with the subtitle, which is hopefully more accurate.

Re: Venture-capital infusions shrank Box founders’ stakes, ignited strife

#29

Post by PhasmaFelis »

gkoberger wrote: post #5

Stories like this make me think it's almost not worth starting a company. Give 1,200 talented people an awesome place to work, be CEO of a company you truly enjoy leading, provide thousands of companies with a service that makes their lives easier, entertain 150k Twitter followers, make a bunch of your employees first-time millionaires, make millions for your investors, make yourself more money than you'll ever be ab…

To paraphrase Terry Pratchett, I'm sure they'll be crying themselves to sleep on top of their mattresses stuffed with hundred-dollar bills.

Re: Venture-capital infusions shrank Box founders’ stakes, ignited strife

#30

Post by BallinBige »

kareemm wrote: post #24
kzhahou wrote: post #21

> Aaron Levie and Dylan Smith are worth more than $100 million combined after turning the cloud software firm they started in a Berkeley, Calif., garage into Box Inc., with 1,200 employees and expected revenue of $285 million this year. ...But getting there took 10 years. This illustrates very well the disparity between founder and non-founder equity. It's considered a negative that Levie and Smith got only $100 mill…

This is why being a super early employee is one of the worst deals in tech: marginally less risk than the founders, long hours, minimal equity, and likely below-market salary. There are upsides, but outside of a few rare cases, I can't imagine joining a company at this stage.

first 5-10% of google and paypal employees MADE BANK
Post reply on HN