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I sold Baremetrics

baremetrics.com

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Re: I sold Baremetrics

#81

Post by chourobin »

dimva wrote: post #32
mattmanser wrote: post #27

Earlier quoted context omitted.

dimva also has his sums very wrong, 3.7 mill over 7 years is over 500k per year, you won't get that at any FAANG for a mid-level position.

GOOG has 3x'd in the past 7 years, FB has 10x'd, AMZN has 10x'd, etc. The initial stock grants would be worth a lot more, plus all the refreshers. My friends who are decent software engineers with a few years of experience are getting offers in the >$500k range right now. And I'm assuming that he would have been promoted at some point. I am comparing what someone with his skills could have earned at a FAMANG, not wha…

might not be a fair comparison if you consider taxes on salary+rsu vs. being taxed on capital gains.

Re: I sold Baremetrics

#82

Post by falcolas »

twox2 wrote: post #74
falcolas wrote: post #69

Earlier quoted context omitted.

Few employees may get a windfall in reality, but it doesn’t make it easier to see (nor does it justify the founder’s choices). Those employees are just as responsible for the company’s success as the founder is; it sucks to see them get shafted while the founder walks away with “fuck you” money.

Agreed, which is why it's good that this stuff is being shared. It's a datapoint to consider for those of us as we make career choices. But let's face it, if we are not founders, then we are just "the help".

And without “the help”, most founders (OP included) won’t make it to the sale. You can’t scale without “the help”. You can’t grow your market without “the help”.

To badly paraphrase someone: “The idea isn’t what’s valuable, the implementation is.” That implementation is probably >90% thanks to “the help”.

Re: I sold Baremetrics

#83

Post by LandR »

bluedevil2k wrote: post #68
ianhawes wrote: post #34

>What I walk away with: $3,700,000 in cash >practically speaking, never need to work again Yikes, does someone want to tell him?

I'm with OP - $3.7M seems like a lot, but it really isn't enough to retire on. I assume he'll need to pay taxes on that, a 20% long-term capital gains tax. Brings it down to about $3M. Being generous and giving him 3.5% return (real return) a year in fixed income, that's only $105,000 a year in income, which he'll need to pay taxes on as well. He'll net out around $85k a year.

$85k a year is surely enough to live off without working?

I'm in the UK, if I could earn a guaranteed £40k a year without working I'd be set for life and would have a pretty great life! That's would give me close to twice the national average salary.

£80k a year would put you into the tiny percent of top earners.

Re: I sold Baremetrics

#86

Post by Veen »

nxmnxm99 wrote: post #76
hn_throwaway_99 wrote: post #63

Earlier quoted context omitted.

I respectfully very much disagree. Even Sam Altman has been arguing that founders should give more equity to startups, mainly because employees who are usually sold on "equity dreams" are all coming to realize those equity dreams are peanuts.

“Even Sam Altman” really, the patron saint of getting credit for other people’s work and risk agrees with that waffley sentiment? Shocker

Isn’t getting credit and cash for other people’s work exactly what you’re advocating.

Re: I sold Baremetrics

#87

Post by falcolas »

howlgarnish wrote: post #80
falcolas wrote: post #36

Earlier quoted context omitted.

$80k for how many years of work? Unless it’s one, I’m with the parent. I’m sure it’s all legal and ‘equitable’ according to the terms, but that’s peanuts of a return for somewhere between 4 and 7 years of work (based off a typical vesting schedule).

No, it's an $80k bonus on top of the salaries they got for X years of work, and they're all still employed as well.

We don’t currently know what their salaries are, but it’s pretty common for startup salaries to be 50-60% of normal salaries. The rest is typically LLC stock grants. It’s done this way with the promise of “when we sell” those stock holders will make bank. $80k isn’t ‘bank’. Especially if Baremetrics was following the startup-standard salaries.

Re: I sold Baremetrics

#88

Post by matthewmacleod »

caffeine wrote: post #66
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…

Why are you making moral judgements on a business decision? The investors didn't HAVE to take a write down, they chose to. The early employees didn't HAVE to join this company, they chose to. Why do you deem it immoral for a founder to do what is best for himself within the bounds of the agreements he has made? This kind of calling-out is common in HN and quite distasteful. Comments like this all amount to saying "X…

We all make moral judgements like this all the time, and it’s totally normal to do so. Morality isn’t defined by what is legally permissible; it’s possible to be simultaneously entirely compliant with your legal obligations, and an absolute raging arsehole who has acted in an immoral manner.

Re: I sold Baremetrics

#89

Post by czbond »

andygcook wrote: post #85

@shpigford - Are you able to exempt your exit from capital gains under the QSBS tax laws? For those curious, more here: https://www.brownadvisory.com/us/qsbs-tax-exemption-valuable...

Founders can, his situation varies. Either QSBS or ideally through 83(b) (where one pays all taxes on company stock at founding in first 30'ish days).

Re: I sold Baremetrics

#90

Post by fortydegrees »

bluedevil2k wrote: post #68
ianhawes wrote: post #34

>What I walk away with: $3,700,000 in cash >practically speaking, never need to work again Yikes, does someone want to tell him?

I'm with OP - $3.7M seems like a lot, but it really isn't enough to retire on. I assume he'll need to pay taxes on that, a 20% long-term capital gains tax. Brings it down to about $3M. Being generous and giving him 3.5% return (real return) a year in fixed income, that's only $105,000 a year in income, which he'll need to pay taxes on as well. He'll net out around $85k a year.

Even if he didn't earn any interest and never earned another penny, at an $85k/yr burn, that $3M will last 35 years. Seems alright?
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