Fred Wilson is a legendary venture capitalist; arguably the best in the game today. He's such a visionary that it wasn't hard to believe when PrivCo announced that Union Square Ventures netted a whopping 5,000% return on their Tumblr investment. What was harder to believe (or maybe I'm just jealous) was what the takeover meant for Tumblr employees in dollars and cents:
The company's first 10 employees will receive an average of $6.2 million in cash; the first 30 will receive an average of $3.3 million in cash, and the rest of the 178 employees will each receive $371,000.
Tumblr founder David Karp, 26, walked away with over $250 million after dropping out of high school to work on the project. Fred Wilson reacted to closing the all-cash deal with Yahoo! with his typical class and humility, stating, "You can count on it — when a deal works out spectacularly everyone involved will take credit for it. This behavior is particularly annoying to the entrepreneurs who put the sweat, blood, and tears into the Company."
But did USV actually make a 5,000% return?
Depends on whom you believe. Fred Wilson says (emphatically) that they did not, and went so far as to call out PrivCo on Hacker News and say their numbers were "garbage".
PrivCo isn't really backing down, though. A poster widely believed to represent PrivCo fired back at Wilson:
The Series A USV invested in was only $775,000 and was at $1/share according to privco and confirmed by docs I've seen. So how much did USV invest? Obviously Tumblr sold for over $200/share, so please do the math and show what's off? Is it a few percent, in which case what does that matter when you've made 5,000%?
Any way you slice it, pretty much everybody got rich on this deal (well, almost everybody, as you'll see below). Of course Fred knows how much he made, but he's not exactly the braggadocious type, so maybe we'll never know.
Now just so you guys don't feel so bad about a bunch of keyboard jockeys getting rich, I'll leave you with this. Not everybody is stoked for Tumblr. I'm guessing the editorial team Tumblr fired last month (who missed out on the payday by less than 30 days) aren't exactly dancing a jig over the news. Maybe that smartass editor who mocked Karp on the way out is wishing he'd taken the news a little better.
Man, how bad would that suck?
I turned down a job offer from Tumblr 2 years ago. Yeah...
That sucks, but you wouldn't have been among the first 30 would you? Let's assume the numbers are somewhat off, that means you missed out on a few 100K maybe. It's big, but it's something you can make back. A few mill though...well that's a different story
Would you have been the first 10 or the first 30 employee to join?
I doubt it, but 2 years salary + 370k is still not a bad deal.
Gave you a sympathy SB.
LOL. That's almost the same as $370,000.00.
CASH.
no not in first 30 or probably even 100 but i'm sure I would've walked away with something
At the time I was just like...what's the difference between what you're doing and what basically everyone else is doing: blogger, livejournal, etc.
Now it looks like the blog platform ecosystem is coming full circle. Serious bloggers are moving away from free services (and even self-hosted Wordpress, if you can believe that) in favor of totally autonomous open-source platforms like Ghost.
Ultimately you don't want to put a ton of work into a blog just to have your content sold out from under you.
Tempore sit qui accusantium dolorum illum quam non. Velit exercitationem reprehenderit eum molestiae qui quas ad. Fugit voluptas eum molestiae error ut vel doloribus. Vel sequi in voluptas aut ut.
Amet modi corrupti ut nesciunt impedit voluptates. Numquam sed nam rerum nobis voluptate et iusto. Commodi eligendi nostrum ut laboriosam. Ut consequuntur similique voluptatem deserunt laboriosam nihil. Et sed et pariatur accusamus sit debitis.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...