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richardlblair

Has anyone looked at the prospectus? The founders are going to do very well.

Michael Cannon-Brookes Shares - 69,732,090 Percentage - 37.7%

Scott Farquhar Shares - 69,732,090 Percentage - 37.7%

Well done, gents. Well. Fucking. Done.

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<3 bootstrapping. They started this company on their credit cards. The founders are already well involved in mentoring local startups here in Australia. This is fantastic for the local ecosystem all around. Atlassian founders/directors/employees will be the PayPal Mafia (for Australia).

Not to nitpick, but it would have probably been far better for the ecosystem if the money was spread more evenly. Few at PayPal made it super big of course (not even the "leaders" in relative terms) but they where also quite young and hungry to do something else. I'm sure they are all going to try and pay it forward as best they can and funding opportunities will increase, but that doesn't necessarily create this dynamic diversified ecosystem that PayPal left behind.

Note that this has been a 14 year play from founding to IPO. It's a long road without VC, but still really nice to see someone building a tech company the old-fashioned way.

Atlassian may be the one of the only tech companies that actually deserves its valuation.

Is it that much longer in today's 8 year minimum timespans for IPO? Especially as founders with %75 majority control and no investors saying no, you can pay yourselves pretty great salaries.

How many employees get to split the remaining 20%?

Well done, founders.

* How many employees get to split the remaining $1.1bn?

(The new valuation, according to the OP)

Actually (and please correct my arithmetic wherever it's wrong), the prospectus shows 96.1% to founders, directors, officers, and VCs (page 146).

At $5.8B, the founders stake is $2.1 billion each, and the 1300 employees share $226 million.

It's good to be a founder!

That's $200k per employee if they sold today, they were already getting paid well.

A nice payout for sure.

Sure, in absolute numbers, $200k is great. Relative to a multibillion liquidity event, and in particular where founders kept so much, it's a shit deal. Two guys have 18x all their employees combined. Oh well, the employees were bad negotiators who sold themselves short. But they created two billionaires and had fun and a working salary along the way! :-)

At any rate, this always bothers me because even though we do what we do because we love technology and helping people, and it's not all about making money, I believe that everyone should reap the rewards in a measure equal to their contribution. Very few people realize how much the cap table favor founders and investors. People happily say "I'm not here to get rich, but if this works then we'll all make money together." That's great, but the reality is that if it succeeds, still a handful of people will rise to become amongst the richest on the planet, while the rest get a very nice (sometimes awesome) payout, but still a tiny fraction of the first one or two. Employees: you were never in it together. You were working to mint a billionaire.

Atlassian was founded in 2002. An experienced developer, with a salary of A$140000 per year in 2015 dollars, who've worked there since 2005 for 10 years, will have received A$1.4m in 2015 dollars in salary. Add the $200k payout and it adds up to A$1.6m.

Atlassian is valued at A$8b, that is roughly $8m per employee.

Collecting only A$1.6m out of A$8m total value per employee isn't spectacular, but it isn't as bad as the nominal $200k payout makes it out to be. If you were working on a full time basis, you never had to fund the business on your credit card, and even if Atlassian went bankrupt the day before the IPO and plunged to $0 in value, you still got to keep A$1.4m of the A$1.6m.

You got to become a millionaire if you saved and invested well, while minting a billionaire. Sure, it's not a good a deal as being a founder of a IPO'ed billion dollar startup, it's not exactly a bad deal either.

If you're counting the employee's salaries, be sure to count the founders' as well.

In Atlassian's case the salaries of founders probably add up to around $3m, which is insignificant next to the $4+b value of their shares.

Also, high salaries for founders is an issue only when the founders did not fund their own business.

You're right, in a startup, funded by VC, that pays the founders significantly more salary than their employees, is a lot less equitable compared to a bootstrapped startup funded by the founders' credit cards, or a VC funded startup that pays its founders little. In the latter cases, the founders take a lot more risk, and so their reward, should their startup succeed, would be a lot more "deserved".

Australia makes it incredibly difficult to give equity to your employees - they literally get double punished and it's often better for the employee not receive. The Australian Taxation Office will charge on receipt.

So you get 1% of the company and it's last investment round was $10M - Boom you get a $100,000 tax bill that year! Even though it's all only paper value.

Then if you do liquidate you're taxed again on the gain!

It's a huge problem and there are a lot of folks in the startup community trying to get it rectified.

Isn't options the default rather than a grant? The tax should only apply on exercising/liquidation.

That's not true. The company gets 10M. The shareholder still received nothing, and thus has no tax liability.

When the shareholder sells their shares they will be taxed.

I don't understand your scenario at all... :\

His scenario was the company raises at 10M and afterwards gives 1% of it's shares to the employee. Actually I think most countries would treat that as taxable income which is why companies usually give options not shares once they get going.

That is still not a taxable event. Even if it's shares and not options.

The shares won't be taxed until they are sold.

I know this, because I've worked in an Australian company and been given shares and they made no difference to my tax liability.

Many employees were compensated with large bonuses from the VC rounds. Indeed, that is why they took VC money.

prospectus: http://www.sec.gov/Archives/edgar/data/1650372/0001047469150...

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