Mailchimp insiders react to employees getting no equity from Intuit sale
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MC’s benefits are great and at the time were top-tier in Atlanta. They are cash/401k heavy and offer great profit sharing incentives. They also make it abundantly clear that they don’t offer equity and when I negotiated my non-MC offer that I ended up accepting, they were clear that they could not match my equity. They even acknowledged that if I was willing to take a risk with the equity it would likely be the advantageous move to make.
Nonetheless, during my time at MC Ben/Dan repeatedly boasted about turning down offers to sell and repeated they were never intending to go that (or the publicly traded) route. This ultimately factored into my decision to leave, as it never appeared I would have a personal stake in the company. I hope other employees interpreted this in a similar manner and I do believe everyone had abundant opportunities to do so.
In the end and in hindsight, I’m happy with my decision to leave and it did pay out. Nonetheless, I do still believe MC is a great company and despite the founders somewhat selling an incorrect vision, are still acting in good faith. I don’t believe they “withheld equity” as they made it explicitly clear it was never offered, or was ever going to be, but I do see how the boasting of never selling out could be interpreted poorly now in hindsight.
Your second point however, “don’t be naive” agree 100%
Oh wait you’re serious. Let me laugh even harder.
Breaking the law for a company is simple a cost of doing business. If that costs too ouch then the lobbying/bribe budget increases to cancel it out m, but most of the time it’s just a line of risk on the balance sheet.
I think a lot of people also have an optimal level of law breakage.
But the big thing that separates your everyday person and companies is that corporations will gladly and willfully break the law, even in cases where they weigh the risk (perhaps they have a legal argument about how it’s not actually breaking the law, but it’s probably paper thin) because it can often be more profitable to commit the crime. and pay whatever fine is imposed than not commit the crime in the first place. It is incredibly rare for anyone to go to jail or be prosecuted individually for corporate crimes, and so the risk to any particular individual is exceedingly low.
I can’t really think of any reasonable example where I could commit a crime as an individual and come out the other side with a net positive, despite being caught/prosecuted.
Corporations aren’t playing with the same deck, and their bad behavior is constantly rewarded. Sure, they can sometimes go over the line and tank the entire operation but that is far and away the exception instead of the rule.
And even in cases where the managed 100% wants fully comply with existing law, there are still tradeoffs. How much do we fund internal enforcement and will that prevent us from being competitive? Which isn't so much about actively trying to break the law, but willing to risk that breakage will happen, or even naive trust of employees.
But it's OK. It was very naive to say 'never' and it was a bit naive to take it at face value. As long as they paid their employees well and treated them with respect, and were clear of their prospects, I fail to see who is hurt here ? Except customers being now under the Intuit umbrella, that must hurt...
In the end what changed is that e-mail based marketing was on the decline, with other mediums taking over. There's a point where an industry that stops growing fast eventually consolidates and it tends to get absorbed by groups that has other revenue streams.
FWIW this is completely incorrect. Over the past 2 years other marketing channels have skyrocketed in cost (eg FB ads) and most brands/companies are now investing heavily into email marketing. It's a significant growth industry right now, more so than at any time since I've been involved with email marketing (since ~2010).
At first I thought it was just phishers trying something new, but when I looked where the mails lead it turned out to be those actual brands.
Yeah, the market valuation went from 10x revenue for a early stage company to 30x revenue for a mature company.
I don't know, having billions looks like a liability to me.
There's a point where it might make sense for him... even if not for bare personal/lifestyle reasons, a billion could be useful to fund plenty new or existing opensource projects in line with his principles.
'Offering' other people a life well lived as if that should be my task and not theirs, and justifying things you otherwise wouldn't do has very big problems. Because you can always take it one step further, it never ends really.
Basically, anyone who's got kids is trying (struggling?) to impart this very life lesson: it's easiest to just get your kids what they want, but that's not the best way to raise them.
You can't teach a man to fish if he's dead from starvation.
You'd never have to worry that a significant unplanned expense would ruin your life. You come down with a major medical condition and end up with years of major medical expenses? Some drunk driver T-bones you and totals your car? Lose your job and spend a year or two unemployed? House burns down and you still owe the majority of your mortgage? None of those will ever be a concern again if you hold that $100M job for even a year.
Medical expenses -> health insurance
Some drunk driver T-bones you and totals your car -> liability insurance is compulsory
Lose your job and spend a year or two unemployed -> unemployment insurance is compulsory, you get 60 percent of what you made for one year
House burns down and you still owe the majority of your mortgage -> uhg, got us here, we can't afford houses but there is private insurance for that
So even though I pay hefty taxes (or because I do), I still end up much richer than a developer in the US. In theory I don't even need to save up money for retirement, as the general pension fund has me covered (though with the current demographic development I don't fully trust that).
So I probably don't have a good reason to give up my morality of more money. Have been never tempted though.
(for what it's worth, I currently work for a company that makes software offering various kinds of secondary insurance, and I've spent the last few months learning about the kinds of things "cancer insurance" and "accident insurance" are for, and it's been an eye-opener)
And as for your car: yeah, liability insurance is compulsory in the US, but it's really painful to be hit by someone who's illegally uninsured. It actually happened to my mom a few years ago—she got lucky, her insurance was willing to pick up the tab, but she could've been on the hook for a lot of money if her insurance punted instead (to be fair, the damage to her car was entirely cosmetic, and her car was still operable, just with a car-sized dent in it).
In Europe this is covered and very rare currently. After the first four years the car need to pass an official exam each six or twelve months. No insurance means that you can't even start the test nor move the car from there except in a tow truck (paid for you). Driving with the test outdated means a fine and after some months your car can be deregistered automatically. It does not worth the trouble.
I hold no ill will towards undocumented immigrants, but there's not much you can do if someone hits you in an illegal vehicle.
Maybe you wouldn’t be willing to sacrifice humans to Kali, but you might still be okay with working in an open-plan office for two years.
Definitely not. But just to be sure, you should still make me an offer.
Mathematically, yes. Practically, so what? 10M is a number that could provide all I could reasonably want for the rest of my life. 10B puts a target on my back, and for what? What does 10B buy me that 10M wouldn't? A life of isolation and extravagance? I can't say that I would turn down the chance to find out, but I'm FI already, and maybe it's lack of imagination but I already have trouble spending my modest discretionary budget as it is.
A private jet.
Influence on the global stage
The ability to finance meaningful changes to the world - be they things like disease eradication, political movements, space endeavors. Rather than needing to band together with like-minded individuals and bring a voice to the table, you can outright create or buy a group to enable your vision (within the constraints of physics, and the political overton window)
Somethings that could interest you:
A private island?
A megayacht?
A mansion/penthouse in a ritzy part of LA/NYC (Bezos's LA mansion alone was 1XX MM)?
A professional sports team?
A private jet?
The ability to call the leader of your country and either get through or get a meeting on the books?
Notice that what's interesting about a lot of those isn't just the initial cost, but many of them have quite high carrying costs.
But those are just interesting generalities. At that wealth you can (really have to) get creative. Paul Allen bought a bunch of rock star's guitars and a bunch of Sci Fi memorabilia, and then built a museum to hold them.
Where is that? Are you planning on living in the country? In most large cities, it doesn't seem like 10MM will be enough for you to live in an estate and still not have to work for ongoing regular expenses (food, etc.)
And it's fine you don't want any of those things. Better than fine, that's great. But there are a lot of things that you need more than 10MM for.
Heck I'd probably fund a couple tenure positions at a university on the condition that they research certain problems and publish everything to an open access journal. What does a bio lab cost to run, would 10 million a year cover it? That'd be 100 years of funding for 10% of my wealth.
I'd probably follow it up by going to one of my cities troubled youth schools and offering full ride scholarships to everyone who graduates. Figure 100 students a year, 100k scholarship, that's another 10 million a year, so another 10% gone.
Tl;Dr I'm having no problems figuring out how to spend 10 billion!
You could start a company that builds rockets to go explore Mars.
In other words, you could do something great.
At 10M, you have, as you say, a modest discretionary budget. Which is to say, it's modest, and not extravagant. The things you can do frivolously while spending $300k/year is different than what you can do while spending $1mm/year, but as you've discovered, unless you get disgustingly ostentatious (I hear the poors only own one car, and drive the same car for longer than a month.), taking care of your creature comforts in a reasonable way isn't that expensive. Eating $400 steak dinner every night for a year is only $150k/yr ("only"). So, other than get ostentatious (what, you don't have multiple houses in multiple states?), what do you do? Change the world.
I mean, congratulations on having joined the two comma club, your little discretionary budget is cute. At 10B, your discretionary budget is probably not actually 1000 times larger, because that's a different game of liquidity, but what you can do without remotely threatening your principal investments is way larger. At 10M, if there was a reason you had to spend $5mm, you'd have to consider it very strongly before doing it. At 10B, you can get $1mm in cash from the bank and light it on fire for the hell of it because you had nothing better to do on a Tuesday night. If there's a movie you want made, you get to ask whomever you want to star in it. You want to have a movie made about your life, starring Nick Cage as you? He's having money problems, so he'll probably say yes.
10B puts you right above Steven Rales, wikipedia article here: https://en.wikipedia.org/wiki/Steven_M._Rales. Which is to say, if you want to be a recluse, be a recluse, but 10b puts you in the club of people who have wikipedia articles written about them, despite not being a household name or noteable. Edward Snowden has a wikipedia article, and he's not a billionaire, but he was forced to do some world changey shit to get that. You'd get that simply for having that kind of money. Poke around the Forbes billionaire list - https://www.forbes.com/real-time-billionaires/. See how many names you recognize as household names. 10b automatically dumps you in those leagues. Marc Benioff's #240 with an estimated $10b. Now, you may not want to be, but if you're familiar with his work, you can do anything like that, on that level. Own a local sports team. It's a bit different rooting for the local sports team when it's your sports team.
Personally, I'd fund science and research and the arts rather than have anything to do with sports. Affordable healthcare. Buy buildings and give buildings to Planned Parenthood so they don't have to keep moving around (something about protestors makes their neighbors nervous). Fix homelessness (which is a big problem, but I'm sure $10m/yr would help lots of aspects of it). Start a chain of coffee shops and over-employ people so that the people that work there have regular weekly schedules and can go to college.
I hate to say it, but that's really a lack of imagination. Instead of $10M principle with a modest discretionary budget, think of the unreasonable shit you could do with $10m every year. Some of it could even be good for other people.
Great for us, as we got almost all of their customers.
I recently heard the story of how that happened. The original founders had no intention of selling out, and had signed a deal with the others that unless they were offered a well-defined but ridiculously high price, that the original founders could buy back the shares to take back control.
Well, the multinational company offered the ridiculously high price, and the original founders had no chance to make a higher offer. So they lost "their baby", which is now just a pale shadow of what it once was.
The founders got a lot of money of course, so not a sob story.
It must be disheartening though, to see something you created get run into the ground.
Bust out the idea bin and make something else!
Also to clarify on the seeming heartless I sort of see things as being diluted when others work on them -- in a good way! -- for each person that adds to your thing it goes from mine to our. Long enough and big enough and it's more other people's creativity than yours. Your baby is all grown up and ready to do it's own thing
Our finance-based culture is very destructive to good companies. Whenever a founder sells a company and leaves, the company almost always goes steeply downhill.
> and had signed a deal with the others that unless they were offered a well-defined but ridiculously high price, that the original founders could buy back the shares to take back control.
Yeah some might figure it out, but for me NH isn't Facebook and I'd like to keep it that way.
It seems like there is a pattern of companies buying other companies and that essentially helps the competitors.
I think that's a bias of hindsight, something people say after seeing it happen in a particular situation. In other situations, principles, promises, and other factors have the last word.
If the founders take the cash and build, I dunno, the world's biggest yacht, that's a waste. But I think that's incredibly unlikely.
it's an email service provider for campaigns and other email spam with a recognizable brand, let's not imagine that this is beneficial beyond helping companies market stuff to people. It's like a meta-business enhancement service. Happy for the founders, hope they do some good with the new payout - but I think you are giving them a bit too much credit. Sure, kick back 100M to your old school district, maybe another 250M to BLM or to Math for America to strike off all of your philanthropic efforts in one go, curate some plebeian sympathies and smile for the cameras but at the end of the day, making it easy to bombard people with endless email campaigns isn't exactly solving global problems
EDIT: I reject hero worship vigorously - Mailchimp did a thing, it made money, and another entity that did a thing and made money that makes MORE money decided to absorb it and the cash payout was so good that investors/founders of MC decided to say fuck it, I'm done. Take my chips, gimme the loot. 12 billion dollars is generational wealth, but I mean I just can't/won't/don't respect people that have enabled spam or a business model that encourages bombarding people with BS. Same thing with IAP - I don't respect people who work for Apple because there was a layered hierarchy of priorities that said "we want to generate revenue at the expense of the people that trust us with their consumer electronics"
I just intrinsically cannot respect people that decide to profit off of wasting people's time, the only commodity you can't generate more of. Instead of craftsmanship we have psychopathic operators that try to fine tune all the ways to extract money from others and even develop meta-endeavors where people pay others to execute activities to get end-user observers ('users' in modern web dev parlance, for the JS devs) to waste time/spend money, for net negative expected value to themselves and others. It's super sordid and I just can't endorse it. Whatever.
In 25 years these guys will probably pull a Paul Allen and then start funding brain research or something after realizing that all the money in the world can't buy time and more life.
It can, it's just that biologists aren't the ones that are winning the equities and securities game most frequently.
Given their inexperience, they throw money at things blindly, not realizing there are lower hanging fruit than the brain.
A billionaire biologist could attack the problem from first principles. And probably make measurable headway.
Define it and tell me how you can't make a measurable impact upon it.
Yes, people die. But we can stop it by continuing to invest in biotech.
This is power, and they market it: Send an email yourself and you may be shut down, send through us and worse case scenario you will have to create a new account to continue.
At the moment their IPs are more bulletproof then their competitors. But that is all they are selling - the ability to push through spam for others.
Every time I use one of their screens to look at some issue I think... There's a bunch of stuff we didn't have to build, all for $80 per month.
And all that other stuff would be a nice package that you would probably be able to buy for $99.
It's the market that https://sendy.co/ is in, but we would have plenty of competition there and better options.
The reason it is only Sendy and a few open source proj's are that SES delivery is not even in the same ballpark as Mailchimp's (I have used both).
And if you want the delivery, you need to pay for Mailchimp or Mailjet anyways. Its the reason you don't save much when sending via the Mailchimp API. The product is not the newsletter builder etc.
Mailchimp is a SaaS, and the value is in the software, just like any SaaS. Specifically the value of email platforms comes from list management, compliance, integrations, branding, etc., all of which are hard to do with the basic-but-reliable email systems we use every day.
None of the ESPs beat our corporate email system on deliverability BTW. They did make it a lot easier to manage email programs, though.
Edit to add, I’m sure IP reputation management is a challenge if your business model is to allow anyone to sign up for free and start sending. Paying clients don’t care about that, though. Deliverability is something you can buy from lots of people. And for small folks, you’re not going to beat the deliverability of Gmail. It’s table stakes IMO. There’s a reason Mailchimp sells itself as a marketing software platform and not “we deliver emails”.
I don't use facebook or instagram or anything anymore, and just solely rely on subscribing to the newsletters of the stuff I like: bands, exhibition spaces, museums, even fashion brands.
Giving out my email tells the almost nothing about myself, except the only valuable thing: I am interested in their services. Most newsletter providers let me opt out with two clicks and I never get any more mails from them.
It really baffles me why there are not more people who enjoy emails, but would rather have another company decide which content they get to see.
No, that would pay a lot of skilled workers a damn good wage for a couple of years. Yachts employ a lot of highly paid people.
In fact all that's been happening is trickle up, since the wealthiest keep siphoning more and more money, such that we essentially have no middle class left.
I like how we use the word class and then deny having a class/caste system.
The yacht is a tangible item that will last and can be pointed to with pride by the workers. Pointless work damages us.
Yes doing the exact opposite of what you have always said tends to do that.
It happened to me. The CTO of the company I worked for moved to another company and recruited a bunch of us from his previous job. He made tall promises, none of which worked out. We were annoyed at the time, but I now realize he didn't intentionally mislead us - he was just overly optimistic about his abilities and his own faith in the new company he joined. It was a disaster for everyone he recruited from his previous job.
Everybody has a price, everyone has a breaking point.
I have no idea what compensation over there looked like, but I can’t imagine that it was anything less than stellar.
I’ve always been of the impression that equity is what you hand out when you can’t afford to compensate people enough otherwise. If they are paying well, not handing out equity seems like a perfectly normal move.
But when you sell for $12B and didn't take investment so all goes directly to you, how can you not allocate at least a million for each employee and change their life? With 1200 employees that's only $1.2B. They can easily give everyone even $2M and have zero impact of their life. What two people can do with $12B which they cannot do with $9B? (Yes I know, the final amount is much less after taxes, fees, etc)
Obv they don't need to allocate money equally, it makes more sense to do it based on tenure.
The point of RSUs is to retain talent that is deemed critical to making the acquisition successful. Your VP of finance isn’t getting any RSUs. The acquiring company probably doesn’t need her, and she possesses no critical knowledge that any other senior financial person doesn’t also possess.
Individual developers often get higher RSUs than managers. Why? More experience with the code and domain knowledge, especially if the engineering manager wasn’t an IC who grew into the role.
I could easily give away $10k to charity and save multiple lives[1] without impacting my quality of life, and given that you are on HN, you likely have $10k you could live without as well. We are literally choosing to have money in some retirement account over saving lives - why would you expect founders to give away money just to make rich tech workers more rich?
[0]: https://the.ink/p/billionaire-wealth-just-got-wealthier [1]: https://www.businessinsider.com/the-worlds-best-charity-can-...
Amazon's tech employees are awarded shares. They are getting life changing money already. But it's not that relevant because here we're talking about a one time event that happened and the employees who were part of that success story should be compensated. It's the right thing to do.
The only argument you can make that I may partially agree with is that why giving the money to the employees. They can donate it for better causes than helping tech employees being more rich. I think in this particular case there's plenty of money to do both and the founders still be left with billions. Allocating $2B to the employees and the rest $10B to be split by the two founders and whatever donations they would like to make sounds like a win-win for everyone and a pretty rational thing to do. I'm not expecting them to give most of the money to the employees. Someone mentioned they have allocated $500M; that's really great but I still think it's too low given the amount of money. I think 10 - 15% is more reasonable.
You had a 'stake' it was just in terms of other kinds of benefits.
If you join a company after it's well-established, then for the most part, unless it's an 'extremely high growth company' - your stock package isn't going to be worth that much, it's just part of comp.
If you joined MC several years after founding, even if they did give you equity, it would be a bit of a nice bonus, and that is all.
Great, it worked out for you. A friend of mine, recently got an offer from a pre-IPO company. He asked for equity, but they are refusing to share any numbers - saying - their lawyers asked them to not do that. Is it normal?
Things may change and you might sell after all, but that is not "withholding" anything, that is just things changing.
I can only imagine this story was spun by employee who saw the founders selling and getting bunch of money and now think they should have reaped some of the benefits.
Money and greed make people stupid.
What's wrong with offering equity and staying private? I don't see any deception there - say if Valve gave equity to it's employees, that'd be perfectly fine.
Of course any company can give out equity to their employees, but if it never turns into money then who cares?
I do agree those are quite different beasts and you want to have an idea of the relative likelihoods if you're making a decision based on them.
What if the company never pays dividends?
Economically, they are the same. But they are taxed differently in many jurisdictions.
(Though in the case of buybacks, the shares you got as an employee are worth something, if the buyback is done as something like an auction.)
Let's vote on the $20mil bonus to the CEO or distribute it amongst the owners of the company. Oh, the CEO (and majority owner) gets it all.
Perhaps they should have. After all, without the employees' help Mailchimp wouldn't have been worth 12 billion today.
It is sad when people see others succeed and get angry.
When you accepted the job, you knew the terms. Those included not getting equity, and those included carrying some risk with known reward.
I don't see how the owners selling retroactively makes the risk-reward balance different. Unless you consider it a risk/downside that someone else gets a windfall and you don't get to share. That seems silly to me tho. How rich someone else is does not affect how much money I need to live, with a few exceptions (inflation, friends, power dynamics in pre-existing relationships).
Many people cannot afford to even own a home in the Bay Area because everyone else around is so rich. Relative wealth is important because "other rich people" drive up prices of everything, from housing, to groceries, to health care.
If my salary doesn't change, but the people around me get a 10% raise, my buying power decreases.
Apart from that, if people were serious about not selling, they’d make employees meaningful shareholders. Salary entails zero loyalty and zero stake in the company on the part of the employee. In the latter case, why would you believe that they wouldn’t sell? That’s what people do.
meanwhile they get to reap (in this case) 100% of the rewards from everyone else’s hard work. if that doesn’t make you angry, perhaps you should reevaluate whose interests your ideology serves.
The hypothetical market value of employees in a world where Mailchimp did offer equity and employees stuck it out to reap that upside doesn't exist, so arguing the point makes no sense.
No, that's the value of MailChimp as a company. That includes the product, the branding, the management and the customer base.
> The value of one's labour is the value it generates - not what anyone is willing to pay for it.
The market value of anything is exactly the value that anyone is willing to pay for it and that's the only value that actually matters in this case. No one knows the exact value that anyone specifically contributes on a large project. How much of MailChimp value is due to its engineers and how much is due to its sales team? The only thing sure is how much the company agreed to pay its emgineers and that didn't include equity.
If you want to own parts of the company you work for, go work for a company giving equities. If you work for a company which doesn't, you are not entitied to a part of the company value when it's sold. That's literally the meaning of being an employee.
How did all these valuables come into existence? Through the employees labour. Thus the value of this labour must be equal to the value of these assets.
> The market value of anything is exactly the value that anyone is willing to pay for it
I never used the term "market value". Sorry if that is what you thought I meant, despite that I didn't use the term. And no, market value is not the only or the best way to measure value.
Yes, that's how employment works. Companies do not pay you exactly the same $$ you generate, that's just common sense? Why would they employ you if you cost just as much profit as you generate?
The question here is whether Mailchimp _exploited_ its employees by not offering equity. Unless an employee was lied to and told they might later receive equity, they all joined under the assumption that they were making a mutually beneficial agreement, and that the compensation offered by Mailchimp was worthwhile (as opposed to going and starting their own company or working for another startup that offered equity).
Every Mailchimp employee was welcome to start their own company if they wanted to capture 100% of the profits they generated.
No. The question is whether Mailchimp's employees would have worked for Mailchimp had they had a completely free choice and good knowledge of the value of their labour (e.g. valuation of the company).
I fail to see how. If you are compensated at the market value of your work, that seems fair and Mailchimp gave generous compensation.
You could argue that the gap between wages and capital gain has become too big, a point on which we will be in agreement but to be honest with you, I think the surprising part is that someone would want to pay 12 billions for a company with $700 million of revenue. Still I have found the market to be surprising for a long time so maybe it's time I reassess my expectations.
Since the founders didn’t really want to sell, they probably had to up their offer into ridiculous range.
MC paid off my house in 4 years, and I retired after another 4.
Just ask partners in law firms or consultancies, or ask yourself if you’d like to own stock in Cargill, IKEA, Mars, Brown Brother Harriman, Bloomberg, Chik-fil-a, fidelity, etc.
But the average private tech company isn’t like that. There’s probably 2-4 founders who pay themselves extravagant salaries and control all voting shares. Minority equity never gets a payday.
Tech companies are usually corporations (often C corps in the startup world.) What equity gets you in the two scenarios is completely different.
Tech start-ups are typically incorporated as c-corps as their structure makes it easier to grant options, startups don’t want to make tax distributions if they make money, LLCs can’t issue preferred shares, and s-corps can’t have more than 100 shareholders, etc. just to name a few.
No one at Cargill or Bloomberg thinks twice about whether the equity is in a c-Corp to LP (all else’s being equal)
What? How is it worthless? When they distribute profits, you'll get your share of them, or you can sell the stock to someone else.
Dividends are the main source of value from stock in a company that doesn't plan to sell. But dividends are also determined by the board. In a closely-held company, the majority owners may also be the board, and they may prefer to leave the profits in the company or take them out a different way.
"Worthless" is an extreme characterization, but the value you receive from owning a minority amount of private stock is much less predictable and controllable than publicly-traded stock.
Regarding worthlessness: I suppose some might place some value on access to company financials.
Nowadays there are plenty of alternatives in Atlanta and no excuse for subpar comp. There are giant regional Microsoft [1], Google [2], and Facebook [3] offices, and a ton of good startups that offer equity at ATDC [4] and beyond.
After it was obvious Mailchimp wasn't the best place to work, I tried to get my Atlanta mailchimp friends to join the then-pre-IPO unicorn I worked at. My equity is now worth eight figures (well, high seven, but I sold some along the way).
I worked with someone even luckier who wound up as high C-suite of Greenlight, pre-unicorn status. Again, by not drinking the kool aid and taking charge of their career.
Mailchimp underpaid these folks. And all for a shitty PHP stack that spams people. It's a job that's one notch above working at Home Depot or The Weather Channel.
Unless you're really happy with what you do (and even if you are), shop around. You owe it to yourself. Microsoft is literally a mile away and will pay so much more.
Mailchimp is going to be scraping the bottom of the barrel for talent after these offices come online. There are $300-400k jobs in the city if you look.
A good lesson for the Atlanta tech scene.
[1] https://www.fox5atlanta.com/news/microsoft-announces-major-e...
[2] https://www.bizjournals.com/atlanta/news/2021/03/23/google-c...
[3] https://atlanta.curbed.com/2020/3/19/21186363/facebook-atlan...
Mailchimp was also super "artsy" (they hire artists to do murals), and my friends talked about how cool the founders were. This played the biggest role, I think. They had a mythos.
There were no lies. The employees werent offered equity that ended up being worth nothing. They got job offers that stipulated X cash with no equity, and they willingly and knowingly accepted those offers, and they got compensated as promised. I fail to see how MailChimp is at fault here.
The fact that there is Microsoft/Google/etc. and tons of other companies in the vicinity that pay way more, and grandparent poster’s friends still were staying there despite the poster’s urging and advertising, tells more about those friends than Mailchimp.
Taking a known cash component with no equity, especially since this is already known and in the open is well established as the safe, "smart" move.
Then you see this hullaballoo about not winning the lottery.
1. Someone chooses not to have equity because they want more cash now, don’t want to risk part of their compensation on equity, etc.
2. The company says their equity will never be liquid so you definitely don’t want it. You accept a cash offer with profit sharing instead. Then they sell the shares for $12 billion leaving you unknown job security and low expected future compensation while they profit off their lies
This usually is a huge red flag. If one of my friends would try to regularly recruit me into their startup I would be very suspicious if the company was on solid ground or if my friend is just desperate and trying to get someone else into the bad deal they found themselves in so they don't have to deal with it alone.
Now, this tier of friend is very close to 'acquaintance' but I think there are plenty of people for whom the boundary of 'being a friend' includes these kinds of acquaintance.
Coca Cola weren't and still aren't offering equity. Nobody describes that as "withholding equity".
Most places in the world, most jobs do not offer equity as part of compensation. And everybody understands that and chooses too apply or not based on what they are offering for compensation.
"pre-IPO unicorns" are very much the exception, very rarely actually pay off, and people who have the opportunity to shop around in that lottery should be grateful but aware that for every guy with an eight figure success story, they're are tens of thousands with some worthless option paperwork that never even made enough money to buy them a meal, let alone a house...
The only lesson here is it is another data point in being very skeptical of someone claiming “we’ll never sell” in a compensation negotiation — if the founder(s) never plan to raise outside money or sell the company there’s very little downside to establishing an employee stock pool and awarding options to folks that may never be exercised.
But if it doesn’t do well, I lose my job and have nothing to fall back on.
Surely it’s better to have a diverse portfolio?
Wouldn’t it be more sensible to buy options in your competitor and hedge your bets?
RSUs are equity.
If you get stock options, there are (very limited) circumstances where those options have favorable taxation relative to income, but it’s a gamble, if you follow the strategies that might yield tax advantages.
I haven't worked at another large corporation since then but I thought that was fairly generous and I still have quite a bit of CSCO from that program.
Given that, 401k stock contributions, ESOP & RSU I think we are right at the line of “expecting” equity as part of your comp for most public companies. It’s close enough that we can presume it’s a standard benefit anyway.
[0] https://rewards.aon.com/en-us/insights/articles/2020/how-com...
[0]https://www.macrotrends.net/stocks/charts/KO/cocacola/stock-...
As a result, I loose just over 50% of my RSU value to income tax when they vest.
"sudo" means "super-user do", is pronounced "soodoo"
and whilst we're nitpicking, I also meant "lose" and not "loose" in the sentence below.
The fact that RSUs are taxed as income in no way means “they aren’t equity”, though, so this whole thread is just filled with bizarre inaccuracies.
My issue relates to how they're treated with respect to taxation by the various revenue authorities. In the UK, the tax paid on RSU's vesting is related to the personal income tax bracket the individual falls into. Which means for anyone in the UK's higher tax bracket, you end up losing ~50% of the amount vesting as tax.
If these behaved like other forms of equity, ordinary shares, preference shares for instance, they'd be taxed as capital, the gains of which would be taxed 'when you sell them' and at a much lower rate of tax - ~50% lower for a UK higher rate tax payer.
I'd rather a company just pay me a higher basic salary than award RSU's. At least then it's both pensionable and often used as a multiplier at bonus/salary raise calculation time.
Of course there's upside to exposing yourself to your company's stock performance, but there's also downside risk, which people looking at equity compensation tend to downplay.
Turns out its worked out well for big tech employees, as big tech has gone up 10x over not very many years.
But that's not a reliable state of affairs into the indefinite future for big tech, and it was never reliable for smaller companies.
Nitpick: "If these behaved like other forms of equity" I don't know what "behaved like" means in this context. You start out without equity. Then your company pays you equity. That's always going to be taxed as income, because it's transparently just income, just paid in a different liquid market.
By behaved like, I actually mean't "taxed like".
You nailed it in your post. The employee is taking on increased risk with RSU's. Risk that is not rewarded with a more favourable tax rate, as other forms of stock (baring the same risk) are.
Yet, you're taxed as if the risk were the same as your salary. Which it isn't. (you'll probably still get paid even if the share price goes down, particularly in large companies).
I'm always wary of companies that try to explain away the relatively low basic salary with "look how many RSU's you're getting instead". Especially so, when they've already been though their initial growth phase. Amazon (AWS) is particularly bad for this in the UK.
But that doesn't make it ok when you specifically say you won't and use that as a justification for your actions many, many times in public. Title doesn't seem sensationalist at all.
This is absolutely right, though sometimes it pisses people off when you do it.
Unfortunately for all of us there are a handful of people who, due to their own wealth, certainly can.
That's not the issue. Most jobs at companies that matter do.
The current new, at best, puts a fine point on this argument, but it doesn't change anything.
And to keep them you just have to keep working?
Maybe I should work as a unicorn as well!! Oh wait I'd rather rest on my actual cashm
I'm at that awkward level where I'm paid enough that I'm at the high end of 'normal' comp for local companies. I didn't think there were jobs at the $300k level for ICs in this city though. It appears the market has changed while I wasn't looking.
I’m sad to hear that is your experience. Perhaps find an employer who wouldn’t treat you like a slave if legally allowed?
Are you wealthy enough to stop working entirely? If not, you (and most of us) are a slave to the system. Yes you can choose to change employers, but you cannot choose to stop working if you want to eat, have a home, electricity, etc.
Employers are not your friend. They don't pay you because they're "nice people".
I feel you’ve been involved in some exploitative workplaces in the past that have pessimistically shaped your view of business.
With that being said, I’m still youngish and I’m probably naive. Maybe I’ll become a jaded capitalist too when I’m older.
You misunderstand. These employers/managers/etc can be decent human beings, but at the end of the day you are a resource to be utilized to further their goals in exchange for an agreed-up sum of money. As long as things are going well, everything's great for everyone involved. However, if/when things start going sideways - for example a round of layoffs are needed, they're going to make hard business decisions based on what's best for the company - your personal situation/needs will not be taken into account.
Don't mistake professional behavior and cooperation at work for friendship. They're not your friends.
Paying someone to be your friend always makes for an awkward relationship.
I don't think it's a pessimistic view of business. I've always felt this way.
Businesses view people as resources. When resources are in high demand, companies compete for you and thus must try to make/keep you happy. When supply is high and demand is low they can and will make lowball offers and make unreasonable demands like working long hours/weekends/etc.
I've worked for good companies and bad. The bad ones always tried to make you feel guilty for not putting in the extra effort. The good ones make you feel like family. But they're still companies with one core mission: grow and make someone more money.
As far as being lied to goes, people would be better off if they replaced "never" with "not in the foreseeable future" any time they hear it. Who knows whether the founders genuinely believed their statements about never selling when they said them. Probably so, but if not, well, it's unfortunate. That being said, I doubt that anyone worked at MailChimp mainly because they believed it would always be privately held.
I think lying in this case would be to say to employees, "We will never sell" while negotiating a sale in the background. Timing is everything.
> To refrain from giving or granting: synonym: keep.
The denotation is the literal dictionary definition. The connotation is the associated meaning that comes to people’s minds.
The connotation of “withholding“ is to prevent someone from getting something they are owed. Business Insider wants to imply that MC employees were owed equity, despite MC being clear and upfront about the fact this was not offered.
This way, many thousands of aggrieved employees who are unsatisfied with their career decisions and seeking someone to blame will click on the article and feel like they are victims of an unjust system. This will generate many pageviews and therefore revenue for Business Insider.
Employees regularly (as in, basically always) join startups for peanuts in equity compared to the equity held by founders. And they're told "we're in this together, we'll win or lose together"... without realizing that the stock they received was so tiny, that the founders' Win means a private island and trust-fund grandchildren, while their own Win will be one fifth of a down payment on a house, even in the best outcome.
The cap table isn't revealed to job candidates, but they still get vague reassurances that they're being offered a "great package." If they saw how their package compared to the founders' holdings, I think employees would demand a hell of a lot more equity, for the risk they take.
With 1200 employees, your share will inevitably be a tiny fraction.
I really think non-founding employees (especially early ones) would be shocked if they saw what the cap table really looked like when they signed up.
If one wants founder equity, found a company!
It is my opinion that one reason people sign up for such low equity, is because they lack information about how equity is divided overall. Employee #1 is OK with 1% because he mistakenly believes that investors hold 40%, founders have 10%, and the option pool is the remaining 49% -- when really the option pool was 8% total until the next round of funding, and the lion's share overall sits with the founders.
2. Nobody is entitled to equity. You chose to take the job knowing you weren’t getting any. Complaining about it now is idiotic. I see similar stories on HN from time to time about employees not getting equity or anything out of an acquisition. I get the feeling it’s the “we’re a team/family” vibe that causes this. People need to wake up and remember they’re simply being paid to do a job for somebody else. You’re not all best friends. If you want to be rich, take the risk and start your own company.
I understand it feels shitty, but I don't think they have a valid complaint. I certainly don't think we should make a universal law "all companies should offer equity compensation".
If this person then turns their back on that for a huge immediate payout, I can sort of understand it, but it still pisses me off.
I very much doubt they generate a lot of spam.
I have been through several acquisitions, as well as working at a firm promising significant profit sharing, then getting fucked over after they actively lie to you.
FFS when Lockheed acquired us, the c-suite got awesome money, but every other employee was fucked over.
People are douchebags during acquisitions.
It could be enforced by the contract.
You could also write a contract that says that in the event of a sale, every previous employee is given equity retrospectively in proportion to how many years they were employed.
Lots of ways.
I don't think this "nihilism-ish" view is healthy. Otherwise, you might as well just argue nobody can promise anything, and anyone who believes any promise is a fool.
IDK, can people ever really promise something in perpetuity? People and circumstances change over a lifetime. To me it is healthier and more realistic to understand this.
I wouldn't say anyone who believes a promise is a fool, though. I would say to believe a promise is to believe it that the person is sincere in their intent, and that they will make a strong effort to continue that intent going forward. But to believe that person can actually stop time and guarantee to never change is not realistic to me.
Note that I'm speaking cosmically here. In the world of business, I would say it always eventually comes down to contracts and money. Those are what business is about at its core, and to expect otherwise is madness.
The headline figure of $12B, of which maybe $1B is split between 1200 employees is almost always a fantasy.
Having been bought out by a large company, the reality is far less rosy.
If you're buying a company for both its assets, and its employees, giving all the employees "fuck you" money is a very bad play. they are going to leave and do things other than work for the new company. which means on day one you have a huge brain drain, culture shift and a hiring headache.
Therefore you need golden handcuffs. Sometimes its a year, most of the time its a lot longer.
Then we have the "headline" figures. Most of them are bollocks. Ctrl-labs supposedly was sold for $500m. It wasn't, it was significantly less than that. most peoples assumptions of what a stock option is valued at during a buyout it as much as 10x out from the actual value you'll receive. This is before we factor in the whole debt swap/priority stakes/other VC semi fraudulent share systems.
unless its an IPO, and you are given actual shares in your hands, most of the money that's talked about during buyouts is illusion.
Sometimes an acquisition works out great but this generally when a company was going to go public anyways.
We hear about all the IPO’s that made 200 overnight millionaires. But we don’t hear about the vast majority that either fail, have a poor exit, or just sort flag in the wind.
To play devils advocate, most people who intentionally optimize their career focusing on equity rather than TC know this fairly well and have had their fair share of duds. You can also make the argument that overall the EV of optimizing your career for equity is probably lower than just getting a high paying FAANG job.
However, with all that being said, the only way to be the "overnight millionaire" is to play the game. Also, there really isn't any overnight millionaires, those people probably worked for years for sub-par comp compared to alternatives and took a large risk whether knowingly or not to get that payout which may or may not have existed.
There really is no free-lunch if your employee #5 at Uber you made tens of millions of dollars, however you took the risk of being employee #5 at Uber. Look at Snapchat though they paid huge amounts of equity when they were trading in the 10's even after they IPO'd if you were employee #10002 and joined Snap at 100k-250k in equity that netted you anywhere between 600k-1.5m if you held the shares, that's not including cash comp. However, you took the risk of joining a tech company that at the time nobody really wanted to join and may very well have closed the doors.
That being said there very much is an alternative risk of going the safe route of just optimizing total TC. That risk is generally that path is well defined, the salary bands are well published, and overall despite whatever amount of effort you put in that will be around the amount you make. You'll be flogged into a corporate grind if you really want to make more either by job hopping or trying to get promoted. The risk with the defined path is well, its just that linear and well defined, not saying it's a great path and maybe even a better one overall but it means you'll be working for Facebook when the next company that is going to disrupt Facebook is potentially out there today.
Equity stakes for employees means the tails on the right side of the distribution are rich. Assuming you get a cash comp that makes you happy that equity stake my very well be the thing that puts you in the 1-10m+ range if your extremely lucky. If not even if its mildly successful a 50-500k payout with a decent salary of say 150k a year over 5 years netted you 160-250k comp a year while putting you in the run to make potentially millions.
If you work for a "startup" that is a decent place to work and respects WLB etc then taking those "risks" over your career might make a-lot of sense. You'll probably learn way more too, have more autonomy, and frankly they can just be alot of fun.
My only point is to be careful joining a company mainly because of ISO stock options, as are the most popular in our industry. It’s more important that you believe strongly in the product and business, and have reason to believe the management is strong. You won’t be given access to the cap table or equity structure and should seriously consider what you’re sacrificing and what your title really means within the context of the size of the company.
Startups are fun. They have less structure, you get to wear many hats, early successes seem easy and the cult of joy is contagious. However a series D 5 years later while the company is still feeling a bit too startup like and on their 3rd CEO is the more likely outcome.
If employees had options/stock, it would be worth exactly as much, since there’s no preferred shares or outside investment to make good on first.
I still believe MC is somewhat better than the more common scenarios where employee pay more in taxes on stock than what they get from stock
Even founders will always have vesting schedules for stock granted.
I would say it probably A lot of people stick around way longer than otherwise because of equity grants making it financially sensible to do so.
There are plenty of ways to retain talent in public or private companies while granting stock options.
I am certain they never wanted to screw anyone and they identified with their "bootstrapping, never sell" culture. I am guilty of the raising bootstrapping to pedestal for many years and understand their values.
Learning from this, it may be good not to a) identify with current beliefs as we might change priorities and learn new things in the future, and b) talk in length about our current beliefs. Perhaps "we don't think we will ever sell and have optimized our business for that, but who knows what future will bring" might have worked better.
Not promising equity if you never sell can be a sensible decision, because otherwise you create expectations of a cash-out that never comes.
Not promising equity if you do sell can be a sensible decision, because you keep more of the money to yourself. As long as you're transparant about not selling, employees can evaluate your remaining value proposition (salary, profit-sharing, perks) and decide whether it's worth it.
All 12k employees evaluated that value proposition and said it's worth it.
At some point the founders changed their mind. And that's okay, people change their minds. Unless they lied about it from the beginning and tricked people into a company vision they knew was bs, but the evidence doesn't clearly point to that.
Yes it’s always sensible to take more money for yourself lol. But they weren’t transparent about not selling (they said they wouldn’t and then they did so they lied). Hence why the employees feel screwed
> All 12k employees evaluated that value proposition and said it's worth it.
No, the value proposition included the promise that was later broken.
1) Founders promise not to sell. Employee is offered salary without equity.
2) Founders say nothing about selling. Employee is offered salary without equity.
In both cases the employee has lost nothing of value. Someone made the founders a pretty ridiculous offer ($12bn for $700mn revenue company). Why should they refuse? No one is being harmed by the sale apart from some employees incorrectly assuming a broken promise means they deserve a chunk of the sale .... a sale that they would NEVER have benefitted from regardless of the original promise.
Compare this to the usual startup "promise" of low salary but equity and fingers crossed we'll sell. Presumbly mailchimp had to offer higher salaries to compensate for the lack of equity offered. And if they didn't then that was a silly choice by the employee (low salary and no equity).
But presumably, the employees are told that they won't get equity, and their cash compensation is high enough to make up for it.
If you tell me not to worry my little noggin about it because we're never selling :) and then you turn around sell for $12B, I'm going to feel a little shafted...
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But looks like they accounted for this with the 500m pool, so in this case they ended up "fixing" the problem.
I think in the end this will just be a cautionary tale on the other side of the "equity is worth TP" stories. I've always felt equity is a lottery ticket, but a lottery ticket isn't completely worthless...
ps: It is a little funny watching all the people rush to defend this, like Mailchimp's founders obviously saw the issue here and negotiated that pool into the deal, but random HNs are so quick to defend it with "that's business folks!" like human emotion is something to throw in the garbage when talking about $$$.
Mailchimp wouldn't have worked out with that mentality, it shows reading their story.
The thing I don't understand - why would someone 'never selling' influence someone else to work for less than market rate?
OK maybe I can think of some reason for a company producing something that saves peoples lives that you're afraid a big company wants to buy to shut down and push their inferior product but this ain't that scenario - so why?!?
sour-grapes. They see the equity payout, and imagined that they'd get a piece of it had they been compensated with equity.
What they don't see is the loss if the company went bust - like most startups do - because hindsight is 20/20
so realistically, it makes little difference if a company paid in equity or cash - as long as you calculate the discount for the equity compensation appropriately.
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Imagine a lottery/raffle/etc. where the state says "we're probably not going to be drawing the results for this, so instead of giving you a ticket with an expected value of $0.05 we'll give you a guaranteed $10 right now"
Mathematically that's a very generous offer!
But then the state turns around and runs the lottery after everyone takes them up on that offer with the understanding the ticket would be worth $0 if there's no draw.
The state paid you more than the expected value of your ticket, by the math you got compensated more than a fair amount and the odds are you would have made a lot less than $10... but do you think most people will be upset?
More upset than if they had just lost a normal drawing?
Do you not see how someone can feel mislead if told X will not happen and X thing happens?
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The rebuttal everyone in this thread is parroting is a tautology. Saying "things change". Yes by the very act of existing over a period of time a company will indeed have changed even if it's just age.
It's not a helpful response to how people feel, and again, you're always free to throw feelings in the trash in business... but at the very least have the courage to admit you're doing it. There's no reason to pretend you don't see why people don't like it
(And again Mailchimp's founders seemed to have that courage, hence the fund)
I assume GP's fix is, "Don't accept below-market pay."
which implies to me that people were accepting below market pay because - reasons?
on edit:
>Do you not see how someone can feel mislead if told X will not happen and X thing happens?
sure, but in the case of someone having accepted below market pay I can see how being misled would have meant an actual hurt suffered.
Let's say I like to bake cakes and the school announces this year because of Corona there will not be a bake sale but then 4 days before they announce guess what there will be anyway! Then I would be upset because I had changed my behavior based on what they said and now I couldn't undo it. I guess anyone who stayed at the company because it wouldn't be sold would feel mislead but why I guess I have a hard time considering to stay at a company because it wouldn't be sold as a decision I would make - I would want other reasons to stay at a company that would not matter whether it was sold or not.
It's obviously a failure of imagination on my part, so it would be good to have an actual scenario as to how someone would feel hurt not just if someone says X and its not X you are mislead, because you still need the part about how X made you do Y instead of Z.
You didn't get cheated, but you feel cheated.
And for the umpteenth time, you're always say to say "fuck your feelings, you knew the deal", but that works both ways, you know the deal on why people are going to feel cheated...
If Mailchimp's founders had never mentioned not selling (or were just ruthless) I'm sure that 500m fund would look a lot different...
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Also you wanted an example, here's one: https://news.ycombinator.com/item?id=28561963
no, this more like me thinking huh I guess there might be a problem here but I have a hard time conceiving of how there actually would be one.
Also I guess I would like an example in the actual scenario - people owning company saying they never sell but then they do many years down the road, people have changed their behavior on this promise how? Are you saying that there were people who would have said no I don't want to work at market rate for you if you're going to sell in the future, I will only work for you for equity if you intend to sell. That's what that example implies to me? Maybe my imagination is failing again here but that sounds crazy, although I have to admit playing the lottery sounds crazy to me anyway so...
And to be clear, I'm not saying that to be mean, but for example, if you get hung up because a lottery is used as an analogy for startup equity (which might as well be a lottery), then it really might be a little past you.
They're leaky abstractions.
Here the part that doesn't map perfectly is it's not either/or, it's a sliding scale.
People at other startups make a market rate and get a little equity, some get below market rate and a lot of equity. Even at the same company people can negotiate their position on that scale, trading one for the other.
But you were told essentially "the equity will never have value so don't worry about that scale".
But it turns out the equity could have value.
The analogy works to convey why people are feeling a certain way, it's not a 1:1 mapping to how startup equity is. That disconnect is what the words "might as well be" convey: https://english.stackexchange.com/a/171622
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Additionally unlike a true lottery there is some form of control and information on outcomes, it might feel random because companies can and do fail for unforeseen reasons, but it's not like someone is throwing darts at a board to choose which tech startup closes its doors today...
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Really I don't understand your deep lack of understanding if you're in this industry, have you never been given large amounts of equity before?
I personally chose a company that gave me solid cash compensation, but not as much as a competing offer, because they offered a lot of equity. I believed in their fundamentals and their position in the market.
Unsurprisingly the company continued to execute well and the equity ended up being worth more than quadruple my cash compensation.
I understand not relying on equity returns to plan out your financial future, but I really don't get a blanket mentality of only taking money upfront and not diversifying.
Do you not invest in the stock market either? Because that's also pretty similar to this situation... if your holdings crater to near nothing the fact you have liquidity from being on the public market doesn't really help...
If I'm told the company will never sell, and they're doing well, I'll feel that I have job security and a team that I will enjoy being part of for a long time. I've got stability.
I'm willing to trade some money for stability. The opposite of stability is "risk".
However, I'm a realist and realize that everyone has a price. MC's price was $12b, which is an incredible amount of money.
The loss of that stability would certainly shake me, though, even knowing that it was possible. And in that case, I'd probably be griping, too, hoping to get something for my pain. But again, I'm a realist, so I know it's unlikely I'd get anything.
the sale is fairly orthogonal to how secure your job is. The team could change, leadership changes, etc, can cause your security to fail. It's merely a feeling of security.
So you're essentially buying (with a reduced salary) the feeling, but not the reality, of security. I would not make that trade, if i were in the same position.
Now, if it ended here, I'd fully understand feeling stiffed and lied to. But mailchimp has about ~800 employees. a 500m pool is more than half a million per employee. That's a hell of a payout, considering the previously accepted stability and derisking.
I'm not sure why, in most comments not just this one, the idea that you need to be cynical and not trust someone's stated good intentions isn't included.
The idea of a world where I must be cynical about everything and trust nothing, is dystopian. And quite simply, would fail incredibly quickly.
Yes, that’s exactly what is happening here - and the criticism is from the employees who were lied to.
> accepting below market pay is you may later regret it
While they might’ve been paid market value, it is still quite disingenuous to deny equity and preach an independent vision. And then using the work done by employees to sellout for a massive payday.
Backstabbing and lying are the cornerstone of the startup system. People shouldn't be shocked when there's money on the line. Sad but true.
Well, I guess that’s that then. We might as well get rid of human ethics and morals, trust based systems, and justice.
Apparently, capitalism and the love of money is all we need!
The answer is not always to give up and support unethical behavior.
In my experience these values are invoked when sums involved are not life altering.
As the saying goes if you owe $5000 to a bank then the bank owns you but if you owe $500MM then you own the bank.
In what way does that make them different from non-billionaires?
The founders probably had the intent to stay independent, they changed their minds.
The employees got a salary to work on a mass email product. Now they are continuing to do the same.
This is just normal business, not a shift in principles.
If they were working at a public green energy foundation dedicated to open source science, and then were bought by Exxon and everything privatized, then this would be a different story.
I'll bet most employees don't really care that much as long as they keep their jobs and working conditions.
https://twitter.com/michaelmartocci/status/14379982016599203...
I mean treating it as a lump sum you only ever pull from without any appreciation in value and you can bankroll your descendants to the tune of $10,000,000 per year for 1200 years.
It's also easier to convince people they'd rather have cash than equity if you tell them the equity will never be liquid.
If the explanation the company gives you for not giving equity is that they're never going to sell, but they end up selling, how is that not being tricked?
Seems like a pretty cut and dry case of bait and switch. Why even tell people you're never going to sell? How about, "equity is not a part of the compensation package we offer," with no false justification?
Acquisitions suck. Depending on the $ amounts/growth trajectories/timelines/etc I'd potentially take less TC up front to avoid one.
On this story though, as long as it’s clear to both parties what the deal is, I think it’s fine to either offer or not offer equity. And a promise not to sell is obviously meaningless unless the corporate structure somehow enforces it.
I don't see how "we weren't given equity but now they sold" is an issue. It doesn't change anything about your past payout. Yes, you would have been better of had you gotten equity, but you probably would have given up salary for that. Apparently you found the "no equity" deal acceptable.
Why does being sold make the old compensation scheme unfair all of a sudden. Its not like employees have a right to equity. It is somewhat standard, but here it was clear enough ahead of time that there would be no equity. The given reason for why they do not offer equity turned out to be wrong. But why does the reason you did not get equity matters? Would a different reason for not giving equity have changed whether you had accepted the job?
12 billion is "ascend to the highest rungs of of wealth" level money. 12 billion puts you into the top 3000 list, looking at wikipedia's billionaire count.
We've been trying to placate the working class for decades now by convincing they should feel ownership in their work and careers. And now you go and say the quiet part out loud that it's actually all a lie and labor is just enriching capital. 10% of the profits may be generously trickled back down to you by your gilded overlords.
It would be refreshingly honest if these founders could just come out and be proud of the fact that they managed to keep the company entirely out of employee hands, and are each probably ~$2b richer because of it. Have some dignity.
You as an employee are not entitled to equity at all. That's incentive, not required.
And equity isn't a great offer either. How many startups REGULARLY fail before they even get out the door?
For everyone talking about how much money they made off of equity options, we can find plenty more that lost out on a chunk of their monthly salary.
I'm not saying don't take equity, but let's be honest: Identifying if a company has the potential for their equity share to outweigh the lost salary requires skills and knowledge most of us don't have.
When execs get a visit from the gold faerie, it's just good manners to spread around some of the manna.
You lot are all liars.
If you don't think your best friend, your parents, your wife/husband, or your children - would not sell you out for $6billion, I reckon you're deluding yourself.
That much money just to go back on a promise to not sell would be a very easy decision (bear in mind that no material harm is done to the employees, no equity was promised, no equity was given, they never had a chance to share in the sale regardless of the founders' promise)
After 15 days the split was announced. :D
So don't believe any single word from any CEO/Founder.
Not that I was surprised. When it comes to strategies and mission, I just don't believe anyone in any position of authority in a company, from the CEO all the way to line managers. The only strategy is to make money, and if anyone at any time thinks they'll make more money doing the opposite of what they promised, they'll flip in a minute.
Turns out though, I end up being a NetSuite Expert due to their move.
I mean when you start a newsletter company, do you really think you would sell it for 12B?
Don‘t forget it means they didn‘t try to sell at: - 1 million USD - 10 million USD - 100 million USD - 1.000 million USD - 5.000 million USD - 10.000 million USD
How many non-founder equity holders who are „just working a job“ would not have tried to sell their equity at an earlier evaluation?
Assuming they really did not want to sell, honestly, 12B for a newsletter tool seems worth changing your mind.
The inverse would actually be evil. Imagine being granted equity and a below market wage in a company that the founder never sold.
Nobody explained this to me, and I spent over two decades running the employee rat race.
Most races take your time and energy, leaving you with far less reward than they promised (no matter how much you excel).
Young ones, let this be a lesson. Struggle and be poor for a decade if necessary, but build your own business. After 15-20 years you will probably be way ahead of your same age employee people.
Content: "It was part of the company lore that they would never sell"
Maybe such promises were made, but the article is pretty scant on evidence.
"Just" $83k per year in bonuses. Sounds like a pretty good deal to me, considering other posters who said MC paid pretty well and had good benefits.
Tons of startups use equity as an excuse to under-pay and most go under, leaving the employees with useless stock and having earned less in their prime years than they could have.
I do wonder. MailChimp employees are probably respected, and could find something else quick. Why don't they threaten to walk out? Without employees, what is the company actually?
The only reason to join a company based on mission or whathaveyou is if it's a non-profit. Maybe, -maybe- if it has done things that hurt the bottom line, to the betterment of employees, that have no precedent in industry (i.e., Gravity Payments), but even then, you benefit from that, so it still counts as comp to my eyes.
That said, I came from Texas. When we started seeing a flood of people from high income regions moving to Texas and driving up home (and other area costs) I realized high inflation states had beat the system. People that lived decently there were royalty when they moved to Texas. I eventually moved to California, and my RSU plan is what made my savings go from $0 to on track within 3 years.
If I can say anything to founders in the Midwest and South: pay RSUs. It's the difference between retirement and spending your entire life working.
If you aren’t offered equity, the company’s decision on whether to sell or remain private is completely irrelevant to you. Whatever happens, you’re not going to benefit anyway. Why even give a shit? Do your job and collect your paycheck, don’t catch feelings thinking you’re part owner. You knew the deal going in, now you want to alter it after the fact for your own benefit? Just another case of people seeing a pile of money and wanting to grab a piece.
If you wanted equity and chose to work there anyway hoping that someday the founders might throw you a bone in case they changed their minds and decided to sell, you’re a fool.
People just need to own the choices they make.
Don't work for such people. Regardless if they give you equity or not.
The exception is Ann Arbor where they understand and value equity. It's also where they have the strongest startup culture. But things are starting to change in Detroit.
Is this possible? How would you go about this? I'm currently in a situation where I'd love to know if "surprise sale" can be avoided.
<20 minutes later>
"I'm not selling the company, the trust is. I said *I* would never sell, but the other trustees are selling it, not me. I can't prevent this"
<20 minutes later>
"OK everyone listen, good luck, I've got my $5B so yeah, lol? Laters!"
Realize that "they would never sell" means they don't plan to sell, but there is a number that would change that decision. So ask what that number is. 100M? 1B? 10B?
You either join with lower salary + equity, or higher salary and no equity. (and equity is always a lottery ticket)
You shouldn't trust anyone saying "they would never", especially in business. Situations change, people change their mind, opportunities change, lives change, regulations change and so on.
People and circumstances change.
Sort of a poison pill that benefits employees during an exit.
Only to see the balloon popped with the other side info on HN a couple of days later.
When one voluntarily terminates a relationship with a company, and agrees to a settlement as part of that, that's it.
Get 1/100 of them to pay you 10$/month and you have 7 billion dollars / year.
If you say something, you should mean it, and you should be held to it. Please stop making excuses for liars.
Very little discussion about how Mailchimp services will perform under Intuit, here.
So the lesson is don't make zero equity and zero exits your personality trait, but probably do the same things either way.
The stories about Google removing the line were wrong. They just moved it from the start to the end of the document.
...and get fired
Now you know how the world works.
(Spam definition, per Spamhaus: "All email sent unsolicited and in bulk is Spam.")
I'd be furious, personally.
E: It appears employees are getting stock and/or payouts after the deal closes. This article is either outdated or misinformed, or both. [1]
[0] https://twitter.com/benchestnut/status/1437514331059630089
[1] https://twitter.com/benchestnut/status/1437869751091535875