It's a good time to reflect on what a coup the split from Odeo was. According to the article, Ev has more than $400m in Twitter equity plus at least $100m in cash... Lot of coin.
Odeo was VC backed wasn't going anywhere for a number of reasons, namely iTunes beating them to the podcast game. It did launch a side project called twttr though, which back then was an SMS focused app. Shortly after Ev bought out the investors in Odeo, spun twttr off to a new company and then sold Odeo which has still never done anything remarkable. Odeo's sale price was something like a million bucks, compared to Twitter's current $4.5b valuation. Talk about identifying and keeping the gems.
As one of the investors said at the time, "He's either going to be remembered as an idiot or as a genius."
The thing is, I don't think even he knew which way it was going to go until after the Summize acquisition two years later.
Twitter always seemed like a worthwhile project, but those first two years were really hard for everyone and from the outside it looked like they might just completely fail to keep up with the growth.
On a somewhat unrelated note, is there any publicly available information on how the split might have been structured (cap table, etc) ? (I'm right in the middle of splitting off a new startup from an existing company...)
Also a double-take on Evan Williams cashing out $100M of his personal shares.
That's a big cash-out for a company that's not even public yet. Max Levchin's share of PayPal, which IPO'd and then was bought for $1.5B, was only estimated at around $40M.
The "Paypal Mafia" people all got <$50mm payouts. That's part of why they advocate for higher founder ownership--so the folks they fund (or work with) won't make the same mistake.
And the cashing-out environment has completely changed. It's harder to go public, but easier to cash out without going public. It's tough to get anything out of the comparison, other than "Boy, things have changed!"
Yeh that musta sucked. But, it goes to show you the quality of the people that came out of that - in terms of follow-on things they have done. Don't need to rehash them here, but I think it is safe to say that they all walked away pretty handily.
Although, unless I am missing something, I am not inclined to fully believe the <$50M payout.
How could Elon Musk get a portion of the $50M, but still afford to personally finance Tesla, SpaceX + the solar company (plus still be spending $200k/mo on his wife and family) ?
Something seems fishy, unless there were a few investments between the Paypal IPO and these other investments that provided him with a boatload of cash - which is entirely possible (e.g. YouTube) but I am not sure.
That one was another one too. This is the type of understated reporting I love from Arrington.
The title spoke about how Sacca owned 10% of Twitter - yet there are so many other 'throw away' gems in there that really make you stop and re-read what you think you just saw.
That's kinda insane that Ev cashed out $100M worth of shares and still is the single largest shareholder.
I'd be surprised if he got standard management fees on a fund where the "bulk" of the money comes from one contributor and they tell you how much of who to buy.
Exactly....even if it isn't the normal fee...say it's 10% of the normal fee (which I HIGHLY doubt), that still 0.2% of $1B Annually.
Which is still $2M annually. He hires 10 people at $100K a piece, and office expenses of about $200K if he wants to be ostentatious. That's about $800K annually.
Not bad, not to mention that he gets his 20% of the carry.
Keep in mind that we are talking 10% of the 2% standard rate which I am relatively certain he isn't getting.
Indeed a great snowstorm(w\ tons of snow) in Tahoe ha. Following @sacca on twitter, I can tell 2010 year of Tiger was really good him. Happy for him.
This trend highlights again that, there are 3-4 companies that become thunder lizards and money just pours on them. As companies ready to go ipo, underwriters want to get early access and back stage tickets.
EDIT: Morgan Stanley takes facebook and JP Morgan takes twitter. Awesome to see underwriters paying upfront to own quality companies - shows how dry the ipo market is and how desperate underwriters are.
Given the rocketing valuations, my guess is a good part of the investors are eyeing a buyout by the likes of Google/Fb rather than wait around until IPO/profits.
Both finance and tech startup-related article. +1.
I thought I'd mention Sharespost. Its a good source to buy premarket stocks. They allow for shareholders (often internal stakeholders) to put their shares up for sale before IPO. Currently, Facebook and Linkedin are up for grabs. I found an interesting article on Linkedin's IPO earlier today. I'll start it in a new thread here in Hacker News.
Odeo was VC backed wasn't going anywhere for a number of reasons, namely iTunes beating them to the podcast game. It did launch a side project called twttr though, which back then was an SMS focused app. Shortly after Ev bought out the investors in Odeo, spun twttr off to a new company and then sold Odeo which has still never done anything remarkable. Odeo's sale price was something like a million bucks, compared to Twitter's current $4.5b valuation. Talk about identifying and keeping the gems.
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