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AngelList acquires Product Hunt

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Re: AngelList acquires Product Hunt

#221

Post by nostrademons »

birken wrote: post #214
nostrademons wrote: post #160

Earlier quoted context omitted.

Likely they pay out enough in cash to make the VCs whole. So assuming 1x participating preferred and 30% of the company owned by VCs, that's $8M + 0.3 * 12M ~= $12M cash returned to VCs, and then the remaining $8M is in Angellist stock distributed to the founders and employees. Assuming 20% employee ownership, it'd be just under $2M to employees collectively and $6+M to Ryan (I think he's a solo founder, right?). If…

Where is AngelList getting this 12M? According to Crunchbase they've raised 24M total. Also why the heck would the board approve spending such a massive chunk of cash on an acquisition which seems rather speculative (IE it isn't an obvious merger like GrubHub-Seamless or DraftKings-FanDuel)? Additionally, why would the VCs prefer cash to shares in AngelList? VCs are in the business of putting money into rising compan…

Crunchbase shows AngelList's funds raised at $400M - there were 3 follow-on rounds with undisclosed amounts after their $24M Series B. (I have to revise my estimate of AngelList's valuation up and my estimate of the percent ownership of PH founders/employees down after this - with $400M raised, they're almost certainly worth at least a billion, and Hoover's equity share would be worth I certainly can't speak for a16z in this particular case, but in other talent acquisitions the VCs usually prefer cash to shares in the acquirer. If they wanted shares in the acquirer, they would've invested directly in their funding rounds. Among other problems with taking shares, it opens them up to potential conflicts of interest (particularly relevant for a16z + AngelList), and it leads to having large positions in companies of which they don't have board seats or any significant visibility.

Ryan Hoover gets "FU" paper money in the form of AngelList shares; he has to wait for AngelList to have its own liquidity event before he gets to realize any of those gains. Still, if his own startup is foundering, that's probably a better bet than going down with the ship.

Re: AngelList acquires Product Hunt

#222

Post by diziet »

nostrademons wrote: post #160
birken wrote: post #63

Earlier quoted context omitted.

Unless AngelList is teeming in cash, which they probably aren't, the deal is likely either all stock or mostly stock. So imagine AngelList internally values themselves at $500M (a number I just made up), to get to the 20M figure they would be offering ~4% of their stock in exchange for PH. Most likely common stock. Adjust that figure up or down depending on what you think AL thinks they are worth.

Likely they pay out enough in cash to make the VCs whole. So assuming 1x participating preferred and 30% of the company owned by VCs, that's $8M + 0.3 * 12M ~= $12M cash returned to VCs, and then the remaining $8M is in Angellist stock distributed to the founders and employees. Assuming 20% employee ownership, it'd be just under $2M to employees collectively and $6+M to Ryan (I think he's a solo founder, right?). If…

Given how hyped the company was, I doubt they got participating preferred terms. Otherwise looks ok.

Re: AngelList acquires Product Hunt

#223

Post by tlogan »

cocktailpeanuts wrote: post #16

As an early fan of ProductHunt I became saddened to watch their community get diluted and become more of a place for "growth hackers" to hang out than people who actually make things. But I also realize this was because they raised tons of money and was under heavy pressure to get traction at any cost. So I think this can be a good news, now that they can just let go and focus on the startup community instead of arti…

Maybe I'm late in the game but Product Hunt was never about finding some new and useful product I might use or buy. And why would be? They also clearly say: "Discover the latest mobile apps, websites, and technology products that everyone's talking about." The keyword here is "talking about".

Now, "growth hackers" ended up believing that being popular on product hunt will get you customers. No - it will not. People who are reading and following Product Hunt are VC - and that is why acquisition by AngelList is an excellent move.

Re: AngelList acquires Product Hunt

#224

Post by lacampbell »

jondubois wrote: post #192
telemele wrote: post #102

Earlier quoted context omitted.

"white dudes connected to VCs" It's not about race. It's about class. The "connected" part is what matters, not the "white dude" part. Your average 99%er white dude does not get funded in Silicon Valley. He gets asked where he "summers" and then walks out confused. What matters in Silicon Valley is being wealthy and having attended the right school. Being connected matters more than anything. The only thing that make…

Maybe race and gender play a small part but I agree that it has a lot more to do with class and connections. I don't know what it takes to get into the Silicon Valley upper class, but hard, quality work isn't it. My best guess is that you have to be great at kissing ass. SV hates jerks, but loves hypocrites. It's not about what you are, it's about how you come across (in a very primitive, superficial way).

I don't know why many people operate under the delusion that the value of their work is the same as how valuable you are perceived. Not to say that there's no correlation, but it's just part of the equation.

People pay a premium for doing business with other people that they like. It's perfectly logical - we all want our daily interactions to be pleasant ones, and would much rather work with people we like than people we find distasteful.

It's completely counter-productive to frame this as everyone else just being superficial ass-kissing hypocrites.

Re: AngelList acquires Product Hunt

#225

Post by birken »

nostrademons wrote: post #221
birken wrote: post #214

Earlier quoted context omitted.

Where is AngelList getting this 12M? According to Crunchbase they've raised 24M total. Also why the heck would the board approve spending such a massive chunk of cash on an acquisition which seems rather speculative (IE it isn't an obvious merger like GrubHub-Seamless or DraftKings-FanDuel)? Additionally, why would the VCs prefer cash to shares in AngelList? VCs are in the business of putting money into rising compan…

Crunchbase shows AngelList's funds raised at $400M - there were 3 follow-on rounds with undisclosed amounts after their $24M Series B. (I have to revise my estimate of AngelList's valuation up and my estimate of the percent ownership of PH founders/employees down after this - with $400M raised, they're almost certainly worth at least a billion, and Hoover's equity share would be worth I certainly can't speak for a16z…

I think the $400M refers to this [1], which based on the reporting seems to be money AngelList has set aside by some other VC to invest in startups on their platform, but I don't think that money is invested in AngelList itself. I couldn't find any other articles talking about investments in AngelList themselves, but who knows maybe they are worth a ton.

That is a fair point about conflicts, that makes sense. Still though if the cash isn't there, it isn't there. I cannot grasp a startup giving up $12M in cash in this environment unless they are absolutely rolling in dough. Doing an equity deal instead of cash is the equivalent of raising $12M at your current valuation (or whatever made up valuation you give yourself in the acquisition negotiations), which seems like a great deal.

Yes, I have no doubt in this deal the founders have "FU" paper money, but I know for a fact most shops and landlords don't accept that as payment :)

1: https://techcrunch.com/2015/10/12/angellist-csc/

Re: AngelList acquires Product Hunt

#226

Post by DonHopkins »

Cbeck527 wrote: post #56
cocktailpeanuts wrote: post #16

As an early fan of ProductHunt I became saddened to watch their community get diluted and become more of a place for "growth hackers" to hang out than people who actually make things. But I also realize this was because they raised tons of money and was under heavy pressure to get traction at any cost. So I think this can be a good news, now that they can just let go and focus on the startup community instead of arti…

I agree- I stopped going back after I realized it was a homogeneous group (read: white dudes connected to VCs) patting each other on the back for releasing half-baked MVPs. I was really turned-off by that. That said, I think it's slowly changing for the better (rigging allegations aside) since I last took a look a year or so ago. I received a small amount of traction after submitting a stupid iMessage sticker pack I…

I think there's a much more accurate metaphor about what they're doing to each other than "patting each other on the back". [1]

[1] https://www.youtube.com/watch?v=mMeqEDEfniA

Re: AngelList acquires Product Hunt

#227

Post by funkyy »

For me, personally Product Hunt was cool until they changed their design and created many categories. It was same as with Steam Greenlight - when it allowed only best games to pass, it was cool. Now due to some changes and adjustments - not so much.

From one of my sites to visit daily they dropped to a group of sites I visit once every 2-3 weeks.

The decisions made few months ago were terrible. Take a product that works, adjust it to widen the public but make the experience more shallow - typical for so many startups lately. Chase for the money and trying to rush things and bump metrics is terrible lately in startups/products I liked.

Re: AngelList acquires Product Hunt

#228

Post by xiaoma »

visakanv wrote: post #43
moeamaya wrote: post #25

Earlier quoted context omitted.

The tough thing about running a maker community is makers don't want to sit around all day to browse products and comment. But you know who does? Growth Hackers. I say this coming from my own experience growing a community of hardware hackers who have even less of an inclination to chat since they aren't always in front of a computer.

You just hit on one of the fundamental reasons why all online communities tend towards toxicity – the people who have the most time and energy to invest in discussions (which eventually snowball into flame wars) are the people who aren't actually doing the actual work. These things then feed off of themselves – in a sociopolitical 'guardian' type community (/r/atheism, /r/childfree, etc etc) it ends up becoming highl…

Github managed to escape that dynamic up until the last couple of years.

Re: AngelList acquires Product Hunt

#229

Post by xiaoma »

jballanc wrote: post #172
nostrademons wrote: post #151

Earlier quoted context omitted.

This is more true of communities built around ideas rather than activities, and there are also moderating tactics you can use to avoid it. For example, online communities based around astronomy, or radio-controlled airplanes, or baking, or other hobbies remain relatively healthy even decades after their founding. Also there are communities around conventionally caustic topics (eg. Lambda: The Ultimate for programming…

I don't understand how people constantly miss the most obvious solution to keeping a community grounded: charge an entry fee.

That doesn't work at all. Just look at sponsored posts on pretty much any publication/blog/forum. Every single one is paid and they race for the lowest tolerated behavior.

Re: AngelList acquires Product Hunt

#230

Post by sanketdasgupta »

2drew3 wrote: post #82
pdeuchler wrote: post #64

This smells fishy to me. ProductHunt had no hope of ever becoming an actual business with realized monetization, it was a glorified marketing tool built by SV insiders to sell the ventures of their friends, colleagues, and investors. Slimy, but I guess not illegal. I start to draw the line though, when PH raises millions of dollars on XX million valuations (that anyone could easily see they had no chance of ever meet…

>relatively small community Lmk when you create a website with this much traffic. http://www.alexa.com/siteinfo/producthunt.com

could anybody point out the reason behind the spike during october?
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