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I sold Baremetrics

baremetrics.com

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Re: I sold Baremetrics

#501

Post by relaunched »

treis wrote: post #500
relaunched wrote: post #498

Earlier quoted context omitted.

The issue is that their fund business model looks at a 20% roi over 5 years as a loss. If they do that 50% of the time, they don't raise another fund. There is nothing wrong with getting what you are entitled to. But, it's worth praising when someone forgoes what they are entitled to, when the situation really isn't a win - win. The VC took an immaterial loss, by choosing for give up an immaterial gain, so that somet…

>The VC took an immaterial loss, by choosing for give up an immaterial gain, so that something material can happen for the founder and their team. But that's not what happened. The business was sold for $4 million. The only difference the VCs actions made was that the founder walked away with 3.7 million instead of 2.9.

There were two things worth pointing out - the acquisition price was lower b/c the founder wanted to walk away and

>>>As part of the structure of the deal, Xenon guaranteed I’d take home $3.7m, regardless of what came up during due diligence. This was important because many times, after months of due diligence, things invariably come up that reduce the purchase price: working capital requirements, unpaid PTO, unrecognized revenue, and a thousand other things. And I wasn’t interested in dealing with that.

I wanted stability and I wanted that $3.7m outcome to hit our family’s financial goals.

Given those terms, I believe the author when he says that this was the best offer he could get that met his terms. If that is true, had the investors insisted on their cut, he founder wouldn't have hit his family financial goal, and would not have sold.

Re: I sold Baremetrics

#502

Post by killingtime74 »

tinyhouse wrote: post #314
bingdig wrote: post #312

Earlier quoted context omitted.

He'll likely pay no federal taxes. If the business is >1 year old, it's treated as capital gains. Since the company is >5 years old, he can likely take advantage of the Qualified Small Business Exemption up to $10m and pay no federal taxes. https://www.investopedia.com/terms/q/qsbs-qualified-small-bu...

Thanks for the info. That's pretty amazing.

it's only amazing because he spent so long making so little

Re: I sold Baremetrics

#503

Post by killingtime74 »

theptip wrote: post #463

> No time-based or performance-based earnout... Everyone on the team stays…or goes Curious about this one; are the acquirers not bothered about the possibility of everyone jumping ship? They have a new CEO and generalists on hand to take over the business immediately? And/or the business is basically in “runs itself” mode, with most of the work being done on growth opportunities? Normally I think of the golden handcu…

you realise this is a $4 million business right? it's not 40 or 400.

Re: I sold Baremetrics

#504

Post by theptip »

killingtime74 wrote: post #503
theptip wrote: post #463

> No time-based or performance-based earnout... Everyone on the team stays…or goes Curious about this one; are the acquirers not bothered about the possibility of everyone jumping ship? They have a new CEO and generalists on hand to take over the business immediately? And/or the business is basically in “runs itself” mode, with most of the work being done on growth opportunities? Normally I think of the golden handcu…

you realise this is a $4 million business right? it's not 40 or 400.

Yes, can you elaborate a bit more?

Seems to me that with a small team, you're more likely to have N=1 bus-count processes which would be sensitive to someone leaving.

Re: I sold Baremetrics

#505

Post by eneveu »

Tade0 wrote: post #119
elric wrote: post #65

Earlier quoted context omitted.

As a Belgian, I can't help but look at these numbers in disbelief. 100-200k/annum for churning out code 40 hours a week? Where do I sign up for this? I'm the best paid employee I know, work insane hours, and I'm not even in that bracket. Addendum: it's very rare to make more than twice the average wage in Belgium as an employee. It's a different matter if you're self employed.

Google in Switzerland my friend. Or generally contract work in Switzerland. This year for a brief, beautiful moment(two months) I was making 750CHF daily before taxes. Regular, experienced employees can count on 100k+ before taxes.

As a freelancer in Paris, I've been invoicing 625€ daily in 2018 and 2019, and 700€ in 2020, doing Big Data / Scala development with a sprinkle of devops, for the same customer. I think I could get 800-900€ if I find a customer that pays better and focus on the Big Data / GCP sectors. Just need to find a contract through word of mouth, and not through a recruiter that takes a 100-150€ margin...

You get less as a salaried employee in France though...

Re: I sold Baremetrics

#506

Post by rjyoungling »

switch11 wrote: post #491
bigiain wrote: post #437

Earlier quoted context omitted.

> It's, more or less, impossible for them to do worse than $0. Of course they can. They can do $0 _and_ fuck someone else's life over out of spite, vindictiveness, or company policy. I'm with all the other poster saying what General Catalyst, while almost certainly at least party for self interested reasons, deserve praise and respect for doing this. I know with certainly that there's a bunch of people reading here w…

Yes, I fall into that category I've had multiple offers to buy and invest. And always do your due diligence. One turned out to be a shell company - which means a bigger company secretly trying to low ball acquire my company In some cases it's VCs or celebrities and you do your due diligence * At the end it comes down to one simple thing If the VC feels this founder and his team worked very hard and not taking that $8…

hear, hear

Re: I sold Baremetrics

#507

Post by dang »

remote_phone wrote: post #134
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…

The takeaway for me is that if you come across a company that is founded by Josh Pigford, do NOT join it. It’s clear that even if the startup gains traction, he will leave before the value gets maximized and also take the lion’s share of any payout and leave you with practically nothing. That’s not what most people expect when they join a start up, they expect to share in the spoils for their hard work.

Personal attacks like this are not allowed on HN. We ban accounts that do it repeatedly, so please don't.

https://news.ycombinator.com/newsguidelines.html

Re: I sold Baremetrics

#508

Post by dang »

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…

I didn't see this in time to make a difference by replying, but this crosses into personal attack in a way that's not cool with the site rules: https://news.ycombinator.com/newsguidelines.html.

If you wanted to say how it seemed to you and raise the questions you felt were unanswered, that's of course fine. But jumping to psychological interpretation and personal denunciation based on a handful of beans in a blog post is not the kind of magic beanstalk we want here.

Re: I sold Baremetrics

#510

Post by barry27 »

I read this whole post saying "barrymetrics" in my mind and only when the genesis of the idea was explained did I twig that it's probably bare-metrics.
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