VCs are guys handling money, they need entrepreneurs (guys getting things done) and vice-versa. They sign a contract which mainly defines how each gets to profit from the other one and the boundaries of their interactions afterwards. It's well-known and the web is full of articles about preferred stock, liquidation preference, convertible debt and similar topics.
But this article is about something new - a dividend that mainly goes only to the founders. It's about entrepreneurs screwing early-employees, entities that until now I've always considered as been in the same bucket. You can rightfully claim that the messenger sucks (which might be well-known) but that doesn't imply anything on the message itself (or its novelty).
You are mustering moral outrage over money that would in any other transaction go to the VC. For decades, VC have been transferring liquidity away from employees and to themselves.
There is something "new" here: the fact that founders have so much leverage in this market that they can claw that value back from investors.
The welfare of the "employees" is a total red herring. Venture capital investors have been fucking over employees directly for almost 20 years.
>It's about entrepreneurs screwing early-employees,
Yes, that surprised me a lot! Especially from founders that are somewhat "famous" and are connected to YC. I expected they don't play these tricks. Greed?
Anyone knows how their employees reacted to this news? If I would have worked 50+ hours for year(s) and then read this... :(
I was early at Palantir (employee #10). Trust me, the founders assumed way more risk than I did when I joined. I didn't even quite understand that fact until I myself started a company. If you know the Airbnb story, you'll know these guys worked their asses off on an idea nobody else believed in. As legend would have it, Joe had a binder of credit cards the way kids would have binders of baseball cards. Think about that sacrifice when you criticize their action today.
Incidentally, this is one of the best reasons to found a company -- equity is distributed in such a way that those who take the biggest risk will be properly rewarded.
Secondly, founders taking money off the table has become common. As mentioned in this very comment thread: "Zuckerberg, Moskovitz, and Parker each got $1m from Accel when they raised their $12.7m Series A according to David Kirkpatrick's The Facebook Effect."
This is both at a far earlier stage, and far more money on percentage basis compared to the overall valuation of the company. I wasn't party to the deal, but I highly doubt any other early Facebookers got liquidity then. But those same people are definitely not complaining today.
That is the pettiest comment I've seen in a while. No one could make it who respects entrepreneurs - or who knows what it means to sweat blood while trying to bring something of value into the world.
But the employees are getting salary and have been for the last 3-4 years. Infact all those employees have been making more than the founders for the last 3-4 years.
And if on joining, you were told about 2 classes of stocks - one for the founders and one for the employees then you should have understood that this was a distinct possibility.
This VC is just using this small soapbox to warn Airbnb not to eff with him. And to try to stem the tide in Silicon Valley where successful founders are compensated for getting a company upto a $1 billion valution WITH revenue.
If an employee had written this, I would have been a little (tiny) bit sympathetic but for a VC to act like he cares for the employees -- you HAVE TO BE KIDDING ME!!!
I would like to think that YC mostly funds ethical people, but that makes AirBnB the worst exception so far. After http://news.ycombinator.com/item?id=2603844 I would expect them to stoop to anything not likely to lead to prison time (and unfortunately the CAN-SPAM act is is pretty useless).
You really should not say this sort of thing when you only have half of both stories. The Airbnbs are not only among the most upstanding people we've funded, but among the most upstanding people I know.
But this article is about something new - a dividend that mainly goes only to the founders. It's about entrepreneurs screwing early-employees, entities that until now I've always considered as been in the same bucket. You can rightfully claim that the messenger sucks (which might be well-known) but that doesn't imply anything on the message itself (or its novelty).