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I sold Baremetrics

baremetrics.com

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Re: I sold Baremetrics

#301

Post by nxmnxm99 »

Veen wrote: post #71
nxmnxm99 wrote: post #56

Earlier quoted context omitted.

The fact that people on hacker news are angry about this cracks me up. The vast majority of folks here really are the crotchety programmers. Yes, a founder gets compensated significantly more than early employees. Massive shocker. If those early employees were talented enough, they’d be founders getting compensated. I don’t know when this dramatic shift happened to Americans to believe building a successful company i…

That rests on the perverse assumption that founders are the most talented and deserving individuals in the universe, and everyone one else should be happy to uncomplainingly serve the interests of these fabulous ubermensch. To say that’s a naive and inaccurate view of the world would be an understatement.

No, it rests on the realistic assumption that there are a million engineers you can hire to be "early employees", and only a handful of Josh Porters with the talent to build something great and the risk tolerance to execute on it.

The market doesn't care about your fragile ego or low self-esteem.

Re: I sold Baremetrics

#302

Post by 0xffff2 »

sequoia wrote: post #266
mooreds wrote: post #144

Earlier quoted context omitted.

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…

you probably aren't making 150k in Birmingham, at least most people are not (even skilled programmers)

Most people aren't making 450k in SV either.

Re: I sold Baremetrics

#303

Post by czbond »

marcinzm wrote: post #155
czbond wrote: post #77

Earlier quoted context omitted.

Which is true, but so is my phrase of "If you want to go broke, found a startup". It cuts very deep on the south side often for founders - whereas employees do get a paycheck. Founders will go YEARS often with little to no income.

I don't disagree however the paycheck for engineering employees is often a lot less than one could get from established companies. Every startup I've talked to sold equity as a large part of the total compensation and argued it makes up for the cash difference. So you're being asked to give up $100-200k/year worth of salary by joining a startup which isn't trivial. For a tiny fraction of equity with multiple restrict…

Wholly agree in most cases the trade is not worth the equity

Re: I sold Baremetrics

#304

Post by sologoub »

realbarack wrote: post #173
mooreds wrote: post #144

Earlier quoted context omitted.

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.

That REALLY depends on the details of the hypothetical persons situation.

EDIT: looks like copy/paste deleted some of the post, adding back:

$450k is likely $200k base, $40k bonus and $210k RSU (source levels.FYI). Most lenders won’t touch RSUs unless you had 2+ years at the same income level and even then they don’t like it. So taking 45% DTI (debt to income) ratio of base + bonus nets $9000 payment (principle + interest + taxes + insurance) and translates into $2mil purchase price assuming the hypothetical person also has $400k downpayment and reserves. That price point gets something like this:

https://www.redfin.com/CA/Mountain-View/2507-Alvin-St-94043/...? (3/1.5 1500 sqft 5800 sqft lot)

Let’s say RSUs take care of savings/extras.

Schools don’t look great for this house. This is where commute comes into play - you can trade long commute for more house and better schools.

Unfortunately, the geographical reality of Bay Area mean that there isn’t a lot of middle ground between short commute/lots of cost/other trade-offs or very long commute, but better everything else.

Re: I sold Baremetrics

#305

Post by RedditKon »

CosmicShadow wrote: post #250
georgeecollins wrote: post #216

Earlier quoted context omitted.

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…

If you make a million dollars an hour, how much time is justified in trying to capture a few hundred thousand dollars when you have limited resources? Oh, you also have to step on the face of a future golden boy to reach it on the shelf. You also have to divert your legal team of several $1000+/hr staff from million & billion dollar cases to this for a month or two. You then have to tell your investors that actually…

Don't forget the $500/hr crisis management firm when the story hits TechCrunch. "Billion dollar VC firm destroys founder's 7-year path to acquisition".

Re: I sold Baremetrics

#306

Post by postsantum »

Sodman wrote: post #265
karimf wrote: post #200

Earlier quoted context omitted.

Relevant tweet from the author: https://twitter.com/shpigford/status/1326162432989990912

I see this "HN is toxic" sentiment on tech twitter a lot, particularly from tech folks on twitter with a lot of followers and fans. My own experience on HN has been that folks may be more cynical than average, and sometimes lacking empathy, but I've found most arguments are at least made based on reality, facts and good faith. Those that aren't usually get downvoted and/or flagged pretty quickly. Meanwhile twitter th…

Toxic has become a synonym of "I don't like that"

Re: I sold Baremetrics

#307

Post by TomVDB »

t0astbread wrote: post #184
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…

I think it always makes sense to consider everything, even if you're not gonna weigh your considerations equally because you might discover something that renders the offer unacceptable to you. If you're really just after high payouts and nothing else, was going into IT even the best choice to begin with?

> If you're really just after high payouts and nothing else, was going into IT even the best choice to begin with?

I don't know many other professions where high salaries are pretty much a given, without cutthroat competition among your peers?

You can get high payouts building a company, becoming a top lawyer or medical professional, but the investment in time, effort, and money is much higher, and the chances of success are lower.

Re: I sold Baremetrics

#308

Post by tinyhouse »

hn_throwaway_99 wrote: post #61
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…

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…

> Even the founder probably got less than a mid/senior level FAANG employee would get (and the FAANG employee had no risk)

Not really... he's been working on the startup for 7 years. Let's assume he had an average salary of 150K during those years. Plus he got $3.7M on the acquisition (it's not clear from his post if that's what he takes home or if it's pre-tax). That's 4.75M.

Now let's assume a senior engineer in FAANG with a an average salary of $350K for 7 years. That's 2.45M. That's a very rough comparison and not taking into account taxes (the FAANG engineer is likely to pay more money in taxes overall).

But the bigger difference is how he spent those 7 years. He spent it building and managing his own company with all the freedom in the world. Compare that to a senior engineer in FAANG...

Update: someone in the comments mentioned he'll likely not need to pay any federal tax on the acquisition money. That makes a huge difference and the take home gap is much larger than my initial estimate.

Re: I sold Baremetrics

#309

Post by paganel »

coward8675309 wrote: post #278
Sodman wrote: post #265

Earlier quoted context omitted.

I see this "HN is toxic" sentiment on tech twitter a lot, particularly from tech folks on twitter with a lot of followers and fans. My own experience on HN has been that folks may be more cynical than average, and sometimes lacking empathy, but I've found most arguments are at least made based on reality, facts and good faith. Those that aren't usually get downvoted and/or flagged pretty quickly. Meanwhile twitter th…

You hit the nail on the head: the cynicism. Cynicism isn’t a morally neutral stance. Assuming everyone else is arguing in bad faith and in favor of their crude short-term political/economic interests. Asserting that all property is theft and that the system is rigged. Dismissing those who disagree as gullible or stupid or (themselves) cynically trying to manipulate people. There is so much of it here and it comes fro…

> Asserting that all property is theft and that the system is rigged.

There is definitely a discussion to be had about property, smarter people than us have had it for at least 150 years (even more, if you include the discussion between Locke and Filmer), don't see anything that cynic about it. I'd go on to say that even Cynicism itself was a really interesting philosophical school [1]. I do agree that that there are some people on this website who still take the IQ thing seriously, but even there, I think that the majority regards it as bogus.

[1] https://en.wikipedia.org/wiki/Cynicism_(philosophy)

Re: I sold Baremetrics

#310

Post by rexreed »

Thanks for actually giving real numbers here. I hate startups that spin fire-sale acquisitions into something more substantial than they are.

So I am super happy to see some real transparency with real numbers and a real talk about the earn out.

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