I worked at MailChimp for a few years. I most recently worked at a company that went through an IPO that I had equity in. When deciding to join my recent company, equity was the largest factor in my move.<p>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.<p>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.<p>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.
Honestly it could be worse, I worked at a company that gave equity and years later it came out that the founders never intended to sell or take VC money. In that case employees “took below market salaries” thinking the stock is worth something but in reality it’s worthless. At least in this Mailchimp situation if you’re not getting equity I assume you’re happy with your cash comp, I’d you’re not, that doesn’t make sense.
I don't really understand why it's framed as withholding equity. It just wasn't offered, totally fair choice by the founders. If you didn't like it, why work there?
1. Nobody can promise to never sell. If you believe that you’re a fool. They held out longer than most.<p>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.
The one thing that is missing from this discussion is the actual value of any stock that the employee might have received.<p>The headline figure of $12B, of which maybe $1B is split between 1200 employees is almost always a fantasy.<p>Having been bought out by a large company, the reality is far less rosy.<p>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.<p>Therefore you need golden handcuffs. Sometimes its a year, most of the time its a lot longer.<p>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.<p>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.
The problem is not that the MC founders never intended to sell, then changed their mind after they reached an interesting sum. The problem is just that they were so certain they will never sell and talked about it so many times, that (some of) their employees now feel betrayed.<p>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.<p>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.
Whether they promised to sell, or not sell, either way, they never promised equity.<p>Not promising equity if you never sell can be a sensible decision, because otherwise you create expectations of a cash-out that never comes.<p>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.<p>All 12k employees evaluated that value proposition and said it's worth it.<p>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.
A problem with making declarative statements about the future is you may change your mind and then be criticised. A problem with accepting below market pay is you may later regret it. There’s a clear fix to both and I don’t see any villains here.
This appears to be a thread with a better explanation of their story.<p><a href="https://twitter.com/michaelmartocci/status/1437998201659920389?s=21" rel="nofollow">https://twitter.com/michaelmartocci/status/14379982016599203...</a>
At least they were honest about withholding equity. Lots of startups do effectively the same thing by granting RSUs that become worthless via an assortment of underhanded mechanisms.
The majority of companies don't give equity in the world. And those who do only give it to certain employees. As they don't violate RSU or stock compensation plans they didn't withheld equities.
If I created a successful company, I would also say that I would never sell. However $12B is multi-generational wealth and with it you can do anything you want. So that sum would also pursuade me.
An interesting angle I saw on this is that usually a $12b exit in a city mints a bunch of new multimillionaires, many of them decide to stay in the area and some of them become angel investors in the area and boost the local startup environment. So it might suck for other entrepreneurs in the area that there aren’t a bunch of new angel investors now - just a few new billionaires.<p>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 see how it hurts to be lied to.<p>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.<p>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?
Everyone has a price, old saying but it's basically true especially for life changing, generational wealth level money and all they had to do is sign on the dotted lines
> "Knowing that this is literally our co-founders' (Ben and Dan) money, and that they share it so generously, is remarkable."<p>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.<p>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.
I don't understand some of the points here.<p>You as an employee are not entitled to equity at all. That's incentive, not required.<p>And equity isn't a great offer either. How many startups REGULARLY fail before they even get out the door?<p>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.<p>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.
Hands up everybody here who wouldn't go back on their word for $6 billion?<p>You lot are all liars.<p>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.
When I was in eBay some years ago I clearly remember the CEO saying during a company all hands: "we're one company, we'll never separate from PayPal".<p>After 15 days the split was announced. :D<p>So don't believe any single word from any CEO/Founder.
Just witnessing firsthand what Intuit has done to TradeGecko in transforming it into “QuickBooks Commerce”. Really great API for interacting with, like, everything, deprecated and EOL’d in just under a year from now. Say your goodbyes to Mailchimp. They’ve probably got about a year before the Intuit business folks complete the assimilation.<p>Turns out though, I end up being a NetSuite Expert due to their move.
I wouldn‘t give up on equity if i didn‘t plan to sell. Because that could lead to others wanting to sell their equity and me losing control.<p>I mean when you start a newsletter company, do you really think you would sell it for 12B?<p>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<p>How many non-founder equity holders who are „just working a job“ would not have tried to sell their equity at an earlier evaluation?<p>Assuming they really did not want to sell, honestly, 12B for a newsletter tool seems worth changing your mind.
“Withheld”? Lol, no. That sounds nefarious. It wasn’t. The founders wanted to retain ownership. That’s their right. It appears employees were paid fair market wages for work.<p>The inverse would actually be evil. Imagine being granted equity and a below market wage in a company that the founder never sold.
This is just another example of why working (and getting educated) to be an employee is usually a poor decision compared to putting your energy into becoming the employer.<p>Nobody explained this to me, and I spent over two decades running the employee rat race.<p>Most races take your time and energy, leaving you with far less reward than they promised (no matter how much you excel).<p>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.
As the article says, equity rarely pays off, that has been my experience. If you are joining a company in hopes you'll be a millionaire once the company exits then you're setting unrealistic expectations and will be disappointed.
Headline: "Mailchimp founders promised to never sell"<p>Content: "It was part of the company lore that they would never sell"<p>Maybe such promises were made, but the article is pretty scant on evidence.
> for current employees the bonuses account for only about 2.5% of the total deal's value and work out to just $83,000 per employee per year.<p>"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.<p>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.
So the lesson is: never believe in promises where you have no control over those that do the promising.<p>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?
This is why I largely stopped looking at company mission and values and such to determine where I want to work (beyond just immediately saying "nope" to even considering a few). I look at comp, culture, and assume my stay will be temporary since the former of those is likely to not change at the rate the market does, and the latter of those is likely to change in ways I object to given time.<p>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.
When I was in the south it was <i>very</i> common to only get paid salary and insurance. The one company that did give me equity gave me $10k. There's nothing wrong with what the founders did.<p>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.<p>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.
The Fed strikes back. The most disturbing thing about this article is that Mailchimp is worth 12b and that Intuit had 12b to spend on it. Couldn't have happened 2 years ago, regardless of demand/supply, product market fit, business strategy, etc.
I don’t understand why people don’t see the outrage here for what it is: pure greed.<p>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.<p>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.
I think it's fairly obvious that using "we will never sell" as a justification for not giving other people equity over the years was just that -- a justification for not giving other people equity over the years. It seems that paid off.
I’m pretty sure for every mail chimp employee that wishes they had pushed for stock compensation, that are scores of other startup employees that wish they had not taken stock in lieu of cash in now worthless start-ups.<p>People just need to own the choices they make.
This resonates interestingly with the recent post about Mullvad, yesterday on HN: <a href="https://news.ycombinator.com/item?id=28551960" rel="nofollow">https://news.ycombinator.com/item?id=28551960</a>
I didn't read the article yet. It's insane to me that founders who didn't take any investment and sell their company for $12B wouldn't allocate a few billions to their 1200 employees, regardless if those employees had equity or not. If that happens then f** these bastards. Nothing I agree more than working for people with shitty morales, no integrity or compassion to others.<p>Don't work for such people. Regardless if they give you equity or not.
I'm am at a loss that otherwise smart people didn't see this coming. The employer/employee relationship is ALWAYS adversarial. An employer is never ever ever going to be watching out for your interests as an employee and always going to be seeking the maximum means of exploiting you, act accordingly. This isn't a new thing. It's not much consolation but mailchimp folks still made out way better than wework folks.
It's the culture. In a lot of places equity isn't understood or valued. Pretty common outside the Valley and maybe New York and Boston. In Michigan startups the top five people might have equity and that's it.<p>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.
Say you work at a small company, 15-20 employees. Your boos tells you he will never sell, but you and your 14-19 colleaques want that on paper.<p>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.
Good for them. I think it was a super overvalued buy because there isn't much defensible IP but smart to get out when you can, and moral analysis of legal business is futile and meaningless. You can aacrive meaning for your own self esteem but money doesn't care.
Are any company charters setup to let employees participate in funding raises or acquisitions at the same terms as the 3rd parties? And what would that do to the marketability of the company to those 3rd parties?<p>Sort of a poison pill that benefits employees during an exit.
Lack of equity at this point is a red flag to me. Points at either internal greed or external greed (investors) deciding hiring talent and offering skin the game isn’t needed. Talent goes where the money is. I learned the hard way, don’t be me.
So funny seeing all these LinkedIn posts show up by pseudo entrepreneurs and startup gurus copy pasting the same shit about how awesome they did by not giving equity.<p>Only to see the balloon popped with the other side info on HN a couple of days later.
My thing is that the founders changed their mind about being acquired, so they could have changed their mind about employee equity at the same time. It's their right to do it how they did, but I also think the blowback is fair.
> But the many employees who have left Mailchimp in recent years are excluded<p>When one voluntarily terminates a relationship with a company, and agrees to a settlement as part of that, that's it.
"Paris is well worth a mass" as Henry IV of France supposedly said after gaining the crown. People can drop their deepest beliefs sometimes when the prize is big enough.
In a business world “never” should be interpreted as “next 3 years”. Even if the one making a claim/promise genuinely mean literally never, the circumstances change. And when they do it is naive to expect them to not react. Don’t be dogmatic about attaching literal meaning to what’s said.
The most interesting thing about this being that people care.<p>Very little discussion about how Mailchimp services will perform under Intuit, here.<p>So the lesson is don't make zero equity and zero exits your personality trait, but probably do the same things either way.
Circumstances changed. They promised to never sell based on their perception of how circumstances would evolve even in the most ambitious scenario at the time, I’d imagine.
This sounds like one of those complaints where they complain about not getting equity but would also complain about getting equity if it turned out to be worth $0.
They're spammers, after all. What would you expect from a spammer.<p>(Spam definition, per Spamhaus: "All email sent unsolicited and in bulk is Spam.")
Note to reader: when you see the "circumstances change" comments here, read as "I too would love nothing more than to fuck over my employees if it means more money for me, and I'd greatly appreciate if this behavior became more acceptable."
I don't see how more employees aren't absolutely enraged. The announcement tweet[0] is filled with congratulations and only a handful of "why intuit?" tweets. Nobody mentioning lying to employees.<p>I'd be furious, personally.<p>E: It appears employees <i>are</i> getting stock and/or payouts after the deal closes. This article is either outdated or misinformed, or both. [1]<p>[0] <a href="https://twitter.com/benchestnut/status/1437514331059630089" rel="nofollow">https://twitter.com/benchestnut/status/1437514331059630089</a><p>[1] <a href="https://twitter.com/benchestnut/status/1437869751091535875" rel="nofollow">https://twitter.com/benchestnut/status/1437869751091535875</a>