econner

These numbers make sense to me. What I wonder though is if Snap goes the way of Twitter and winds up halving in valuation by the lockup period expiration. Is it still $1 million per basis point? Or will ratchets kick in that further dilute employees and drive the value down?

The idea is that employees accepted a lower salary in exchange for the chance to earn more through stock from an eventual liquidity event. They're arguing that the gain from the liquidity event is just enough to make up the difference in salary.

I thought his point was just that GitHub is still private. Snap going public is a different situation.

Yea, it's to keep the price somewhat stable after the IPO. It's a very standard thing to do and the share price of a company usually drops permanently when the lock up period expires.

Maybe a good rule of thumb is 10-20% of the company could be owned by employees at the time of IPO which could materially change the share price.

Quick research suggests this timeline to me:

Summer 2014 Apigee raises last private funding at a $600M valuation

April 2015 Apigee IPOs at a valuation of $500M

By end of 2015 Apigee closes at a valuation of ~$250M.

So the company lost almost 2/3rds of its value probably right as the lockup period was expiring for employees to sell shares.

What exactly does Mulesoft do?

Is it possible that his experience is not representative?

Edit: Digging a bit further, it looks like the startup that he sold was Valet Gourmet which was a food delivery business in North Carolina and he worked on it for ~12 years. That's probably a bit longer than the tech startup timelines we tend to think of here.

At the start of 2016 there was some consensus that things were cooling off. Markets were down, there were fewer seed stage investments and an all but dead tech IPO market for the first half of the year. Investors started to advise companies to lower their burn rates [https://bothsidesofthetable.com/so-what-is-the-right-level-o...]. Arguably the market conditions were driven by the 2015 - 2016 Chinese market turbulence [https://en.wikipedia.org/wiki/2015%E2%80%9316_Chinese_stock_...], but who really knows. Growth has picked back up this year and I’d expect job growth to bounce back.

Yep, yep, my favorite part is using Dropbox to deploy code.

Met @pud once while he was CEO of Blippy. Very nice guy and great to talk to. I also absolutely love his post: "Why Must You Laugh at My Back End" (http://pud.com/post/9582597828/why-must-you-laugh-at-my-back...). He's built lots of crazy impressive stuff by himself and DistroKid is no different.

Yea, is that $40,000,000 in stock for 1 year of work?

Executive Compensation

  Name and Principal Position
        Year         Salary        Bonus(1)          Stock Awards(2)     All Other   Total
  Evan Spiegel
            2016     $ 503,205     $ 1,000,000       $ —                 $ 901,635   $ 2,404,840      
            2015       363,715       1,000,000         —                   344,756     1,708,471      
  Imran Khan
            2016       241,539       5,239,460         —                   14,658      5,495,657      
            2015       230,000       —                 145,292,145         348         145,522,493    
  Timothy Sehn(6)
            2016       400,152       1,000,000         40,000,020          8,348       41,408,520

Possibly a dumb question, but doesn't 2017 Q1 end in 2 months? How are they already reporting results?

> "AI run hedge fund blows up due to black swan event"

Why's this an argument against AI run hedge funds? Funds run by humans also blow up due to black swan events.

350,000 accounts is not a "massive network". This is all hype.

I'd believe it. For what it's worth, something like 80% - 90% of all email is spam. It's usually better to leave it there and cordon it off so that real users don't notice it. Spammers don't get feedback that their spam isn't being shown to real users.

Also 350,000 accounts is hardly "massive" as the clickbait title suggests. No way that can account for more than a small percentage of traffic.

What makes you so sure? Say the company is valued at $300M when you join. $100,000 worth of ISOs is 0.03% which is not unreasonable if you're an engineer from say employee 5 to employee 50 or so. Now, the company becomes a unicorn valued at $3B which is 10x.

Ah, yes, you're right. It would offset future capital gains.

What percent of the "profits" do you take? Can you explain how ESOFund would work in the situation I outlined above?

This is excellent advice. For what it's worth you really need to know the total number of outstanding shares to appropriately assess the 409A valuation. The stock could split later.

Most unicorns disallow this nowadays to prevent the headache Facebook had when IPOing (very explicit you cannot transfer shares without the companies consent clauses in contracts). Some do controlled tender offers which allow employees to sell some shares, but these happen at the behest of the company, not the employee.

Sorry, I meant ISOs. Good clarification.

This advice is often given but it's easier said than done. Let's say you work at a unicorn for 3 years and in that time it goes up 10x in VC fantasy land valuation. On paper you have a lot of money and the company reasonably might go public a couple years after you leave.

Let's say you're granted about a year's salary in shares when you first join so you've vested $100K for a round number. When you leave that equity is worth $1 million. Now, you have to come to the table with the $100K to exercise and probably another $200K to pay the tax man. If the company goes belly up, you lose $100K outright and are stuck with a $200K tax credit that you get back in $3K per year deductions for the rest of your life.

Or, you could have exercised the shares as you vested and paid a bit less in tax with the lower 409A valuation..but you're still maybe looking at a $100K total tax bill.

Do you take the risk or not? Or do you end up locked in for a few more years of handcuffs while waiting it out?

It'd be really hard for me at least to walk away from this situation with nothing..so then I have to value the equity as something. And if I want to treat it as 0 it'd be really tempting to wait a few years and see..which again means the equity is worth something to me.

How do I short this loan category?

Is a secondary sale good or bad? Why ask this question?

I've recently started to complete side projects. I also graduated in 2012 so I was in a similar position a few months ago. What clicked for me was that I realized I didn't have to do anything heroic. At first I'd start a project and feel like I had to complete it in a couple of weeks, but then you're trying to spend all your free time on it and you tend to burn out quickly that way. Instead now I start a project, spend a few hours on it, and then just try to spend a little bit of time on it every day. Even just 20 minutes can make a huge difference. The key is to just do a little bit, steadily, over a long period of time. It really adds up. And doing that keeps you engaged with the project and wanting to spend time on it.

How does clawing back some of the variable fees alleviate the fixed part of the fee? You're still paying the fixed part of the fee no matter what!

It sounds like you work at a hedge fund and are rationalizing...

Lots of people will say not to use Django because ORMs don't scale. In my experience, if you don't use an ORM you end up writing one (and doing a poor job) in the early stages of a project. Usually this happens because you're changing things quickly and favoring iteration time. You don't know what you're building yet, so you can't choose the super optimized solution. Once you need to scale things can become specialized and it's easier to go that route because you have a better idea what you're building.

User growth, number of page views, engagement / retention + trajectory, evaluated against similar businesses.

People said the same thing of snapchat, facebook, and twitter early on.

Why was he selling the website? (That would be my first question in evaluating it)