notbitter | 14 years ago | on: Later-stage rounds and “setting the bar too high”
notbitter's comments
notbitter | 14 years ago | on: Later-stage rounds and “setting the bar too high”
Sure, the VCs know how to take care of themselves, but what about the risk of putting your employees underwater?
notbitter | 14 years ago | on: Three Types of Acquisitions
Talent ... As a rule of thumb, these acquisitions are priced at approximately $1M/engineer
Of which more than 90% will go to the founders and investors. The engineers being bought for $1M will be lucky to get $100K out of it.
Anybody out there want to justify or at least explain this practice?
notbitter | 14 years ago | on: Gowalla Founders v. Gowalla Investors
This is why Gowalla's investors are diversified across multiple startups. For them this is just one setback in a much larger game.
The people getting screwed here are Gowalla's employees, who put years of effort into a single project and whose options are now worth zero.
notbitter | 14 years ago | on: Equity Investment Simulation: Illustrating Dilution
Because the common stockholders don't have a seat at the table. Instead, when the company decides to sell, the execs fully dilute the common by granting themselves the remainder of the pool (with acceleration on change of control, of course).
notbitter | 14 years ago | on: An Introduction to Stock & Options for the Tech Entrepreneur or Startup Employee
Well that just scared the crap out of me. Fortunately, the rest of the net believes that you have 30 days from the date of purchase.
notbitter | 14 years ago | on: Understanding How Dilution Affects You At A Startup
Actually, it looks like Fred Wilson did an example here: http://www.avc.com/a_vc/2011/10/liquidation-analysis-continu...
Note that his example does not show a multiple on the liquidation preference, and it doesn't show how the early employees can get screwed even when the founders do well. But it's more realistic than Suster's infographic.
notbitter | 14 years ago | on: Understanding How Dilution Affects You At A Startup
Unfortunately not. The people who have that spreadsheet would find it very hard to hire if employees knew how the game was rigged.
notbitter | 14 years ago | on: Understanding How Dilution Affects You At A Startup
When investors talk about dilution numbers they only present the best case scenario, and this post is no exception.
If you really want to understand dilution, don't look at the best case. You need a graph showing your payoff as a function of exit size. Pay special attention to the range where liquidation preferences and multipliers kick in, because the sharks aren't going make you an infographic for that case.
notbitter | 14 years ago | on: Chrome Privacy
Glad to hear it. Chrome is great in every other way.
notbitter | 14 years ago | on: Chrome Privacy
For whatever reason, Chrome does seem to make life hard for privacy extensions like Ghostery:
"As Chrome's resource blocking API is not yet comprehensive, some elements may execute." - http://www.ghostery.com/download
notbitter | 14 years ago | on: How to self-educate if you lack a formal design education
Why would you sacrifice your objectivity for what you admit is a pittance?
notbitter | 14 years ago | on: First employee of startup? You are probably getting screwed
You forgot that the Series B round was raised at a bubble-driven $60m valuation. Investor preferences kick in at the $30m exit so the employee gets $52,500.
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Based on the emails I get from recruiters bragging about how much money their companies have raised, it's clear that most engineers don't understand this, even if it's obvious to founders.