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I sold Baremetrics

baremetrics.com

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Re: I sold Baremetrics

#251

Post by TuringNYC »

bob33212 wrote: post #72
hn_throwaway_99 wrote: post #61

Earlier quoted context omitted.

Not making any other assumptions here, but I think this is a great example of something that's become more and more obvious to HNers over the past few years: from a financial perspective, if you have an opportunity to join a FAANG vs a startup, it pretty much almost always makes financial sense (usually much more sense) to join the FAANG. And since it usually makes a LOT more financial sense, it can often make a lot…

A startup makes sense if you are looking to do something different or to expand you skillset. Working at a major corporation can feel stifling over time. The important thing to understand that there is almost 0% chance that your "1-4%" ownership will ever be more than 6 figures.

And that is if you even have 1-4%. It is common to get 5,000 or 10,000 or some other amount of options/shares while having now access to the cap table -- you know the numerator but not the denominator and no details on preference.

The only realistic value to assign is zero.

Re: I sold Baremetrics

#252

Post by gumby »

caffeine wrote: post #217
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 think it's extremely valuable as a lesson for prospective early employees. My own personal takeaway is crystal clear: if you want to benefit from the sale of something, you need to be the owner! Much like a gardener or builder who doesn't get paid out when the house gets sold, unless you have a LOT of equity as an early employee, you will not be getting founder-type payouts (and rightly so as you took little to no…

Companies don't have to be run that way. When we sold Cygnus the receptionist was able to pay off her mortgage and other debt. She was a 65 year old divorced woman and now she could afford to retire (she stayed with the company though).

Of course we were a traditional SV startup -- people are different these days.

Re: I sold Baremetrics

#253

Post by nrmitchi »

georgeecollins wrote: post #216
RedditKon wrote: post #175

Earlier quoted context omitted.

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…

I don't want to make any moral judgements against people making business decisions, in particular this founder for making the best deal possible. Good for him. However, no matter how much money General Catalyst or Bessemer made last year, I would not want to invest with them going forward. I get that this is only money on the margins, and they get a benefit from a write off. Still, how hard would they have had to fig…

In this situation I think General Catalyst and Bessemer got more than 800k worth of good-will by not blocking this deal that they knew wouldn't get them the results they were originally looking for.

If a single founder decides to accept their money based on this action, and then has a VC-style outcome, they've made a good decision.

Re: I sold Baremetrics

#254

Post by kleinsch »

ineedasername wrote: post #183
mooreds wrote: post #113

Earlier quoted context omitted.

> Of course, not everyone can get an offer at a FAANG Note that this is true for many reasons, not all of which are related to technical ability. Not everyone should try to get a FAANG job, either. Factors candidates may consider: * how much time they want to spend interviewing/prepping * what their previous experience has been * where they went to school * where they are willing to live * what type of work they like…

where they went to school I know for a while the rumors were basically that if you hadn't gone to a place like Stanford, you weren't getting a job, at least at Google (Maybe Facebook too?) Is this still the case? (Was it ever the case, or were things a more flexible?)

If you’re a new college grad, it’s definitely easier coming from those schools. It’s also almost impossible to get a FTE job after college without interning, and they recruit heavily from the top schools.

If you have experience already, where you went to school gets dramatically less important the more experience you have. I went to a decent (but definitely not top tier) state school and have 15 years experience, had no trouble getting interviews at FAANG companies and passed interviews at a few.

Re: I sold Baremetrics

#255

Post by brettcvz »

simonebrunozzi wrote: post #224

Jonathan Siegel is mentioned in the article (his company acquired Baremetrics). I dealt with Jonathan in the past, and I could only say good things about him - not just his business acumen, but his integrity and generosity. Years ago Jonathan was in a position where we needed to buy back his shares in a company in which he invested early. He could have asked for a much higher price, and instead he graciously agreed t…

Likewise re. Jonathan - we sold filepicker.io (now Filestack) to Jonathan and Xenon Ventures in 2014 and it was a very positive experience. For companies with solid revenues but not venture-scale growth looking for a clean exit, I would highly recommend reaching out to Jonathan and team. Happy to make an introduction if helpful.

Re: I sold Baremetrics

#256

Post by mrtksn »

Silhouette wrote: post #239
mrtksn wrote: post #229

Earlier quoted context omitted.

In the UK you could make good money but the trick is to be a consultant and bill your employer through your Limited company. At one place where I worked with a permanent contract, the consultants were billing at 800-1200 gbp per day depending on seniority. There was agency cut of course but overall they made real well. this is when working at the same office at the same hours right next to me, just like an employee.…

I haven’t been in the UK since a while so I hear that now things changed so you can no longer pretend to run a company when being essentially an employee. That's actually been the case for about 20 years now. The relevant term is "IR35".

Hmm, I have been driving relatively fast lately. must be the relativistic speeds that 20 years is not the same for both of us!

Anyway, apparently the changes are postponed to April 2021 at stationery frame of reference: https://www.taylorhopkinson.com/ir35/

Re: I sold Baremetrics

#257

Post by gumby »

ccmcarey wrote: post #5

I've always loved the transparency and frank writings by Baremetrics. > As part of the structure of the deal, Xenon guaranteed I’d take home $3.7m, regardless of what came up during due diligence Interesting, I wonder how this is structured - surely there are items that can come up during due diligence that are deal-breakers for Xenon, and surely due-diligence is performed before the contract is closed? > But they we…

> I have no idea how they managed to get the investors to walk with nothing, when the founders walked away with so much.

If you're not going to make any money and the amount you'll lose won't piss of your LPs then the goodwill from an entrepreneur you like working with is worth more than the cash.

Re: I sold Baremetrics

#258

Post by TuringNYC »

ericd wrote: post #232
pc86 wrote: post #103

Earlier quoted context omitted.

Almost a 0% chance it will be worth anything more than $0 and, maybe, a good story.

This is a commonly repeated trope, I guess it's to inoculate people from being "suckered in", but it hasn't been true from what I've seen, having lots of friends involved startups. Even "failing" startups frequently get acquihired for non-trivial amounts per person, and since the point of that is to get the people, those amounts typically go to retaining the people. And many of the people I've known have done really…

Selecting at random, i'd disagree with you. Selecting with loaded dice sounds intriguing. Can you please share some high level selection criteria to evaluate potential startup employers? The only one i follow is repeat-founder-previous-exit.

Re: I sold Baremetrics

#259

Post by coward8675309 »

Jochim wrote: post #231
coward8675309 wrote: post #186

Earlier quoted context omitted.

The reality is that many startup employees may have stacked Stanford STEM degrees yadda yadda yadda, but they can’t do basic math, don’t have a good intuitive grasp of probability, have outlandish expectations, and/or don’t ask clarifying questions about the cap table. One of my startups sold for about $25-40MM depending on whether you count pre- or post-earnout. The typical engineer got maybe a quarter of a percent…

Agreed on not joining a startup for the money. Although it seems like a lot of damage has been done in setting a cultural expectation that joining a startup early will see you become a multi-millionaire, to the benefit of startups everywhere I suppose. Correct me if I'm wrong here, but isn't another major issue faced by early employees that the math might look good when they join the company, but further rounds dilut…

Yes, though the expression “an up round is an up round” has a lot of truth to it. Dilution is important if you care about control, but as long as the stock is worth more on a per-share basis, you’re doing better.

The problem is when people anchor their calculations about their future lottery winnings to the current float.

I try to tamp down expectations when I’m hiring by trying to sketch out a wide range of plausible scenarios (basically the Drake Equation for startups) but I’m going to go out on a limb and guess that a lot of hiring managers and HR departments set new hires up for disappointment by not throwing cold water on their very optimistic math.

Re: I sold Baremetrics

#260

Post by kgog »

> As part of the structure of the deal, Xenon guaranteed I’d take home $3.7m, regardless of what came up during due diligence.

I have never seen this before. Guaranteed outcome regardless of DD. Is this an outlier company?

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