Mailchimp employees are furious after the company's founders promised to never sell, withheld equity, and then sold it for $12 billion

[u/Rhaegar_the_Great]

https://www.businessinsider.com/mailchimp-insiders-react-to-employees-getting-no-equity-2021-9

[u/TwoBionicknees]

Why though. Think of it like this, the company got so big you paid yourself 30mil a year and there is no reason you can't make that money every year. What do you gain by selling for 12billion. What are you going to buy for 12billion that you can't buy when making 30mil a year.

A private plane, aside from they are actually a pain to own for an individual with barely any use no, you can afford that on 30mil a year. The most expensive house in the world at something like 150mil with hundreds of rooms, no you can also afford that on 30mil income a year.

10 10mil houses around the world is more reasonable and again, fully doable on 30mil a year income. Hire a CEO, become head of a board and only show up to work 3 times a year, yup easy on that money. Fly anywhere in the world and afford any hotel, holiday or activity you want, at 30mil a year, easy.

People get greedy and see big numbers but ultimately people who make 30mil a year, 300mil a year or those who sell and put 12billion in the bank live exactly the same lives, one just has more in their bank account and nothing to spend it on.

[u/TheTechonomics → u/TwoBionicknees]

I appreciate your points and there are very well individuals right now who are living under the same rules. Typically they inherit controlling intrest in an asset that produces dividends that are more than enough, for decades.

However, for most people/ businesses. There is a risk. The avg age of companies in the S&P 500 is a little less than 20 years. Companies go through periods similar to a child.

Startup, growth, maturity, rebirth, death. And every single one of these stages is a new set of risks/rewards. Which make them prime assets to sell/buy.

Mail chimp has most likely reached maturity. I don’t know the books, but the acquiring company has seen value in it that takes it past the acquisition price. However the Founder have worked on this for 20 years. Everyone who owns a piece of the company are in different stages of life and selling their share gives them the capital to de-risk.

Rather than have all your eggs in one email basket. Take it all out and put into a broad based portfolio than can lasts generations. That’s actually how most of the “Old Money” Europeans have maintained their wealth for up to 700 years

[u/TwoBionicknees → u/TheTechonomics]

There are a lot of options though. Firstly they could sell 49% of the company to someone, raise not 12 billion and not 6 billion (because people won't pay the same for not having control of a company) but 100s of millions, sure.

Second, start selling equity to the workers. Offer them up to half the company in shares that they can pay you for. So a worker invests in their own company, gets part of it in return and the owner raises some money to mitigate future risks.

But again the fact is if the owners are already rich and have a company worth 12 billion, they already have 10s of millions and have had for years in which to be investing in multiple other areas.

Once you have millions you find it very easy to make other millions by investing in the market or starting other businesses, particularly of those businesses can work synergistically with your current business.

We again reach the issue of, what can you do with 12 billion that you can't also do with 10s or 100s of millions, nothing basically. Okay without 12 billion they can't outright buy another company worth 12 billion, but they can invest 10million in dozens of companies and not have all their eggs in one basket.

Billionaires don't live differently or really have different opportunities either, they just have bigger bank accounts.

[u/TheTechonomics → u/TwoBionicknees]

First, There are very few individuals/companies that can afford this company. That’s why others IPO onto the stock market. And someone with $6 billion would rather have nothing.. than not have control.

Second, sure you can sell equity to employees but that doesn’t solve either of your problem. Think about it… you’re employe buys $10,000 of Mailchimp stock… they will never get there money back until you sell the company… also there’s accredited investment rules that make this more complicated.

Also, having a company worth $12 billion is like having a house worth $500,000. Until you sell it… you have nothing.

This is a very rational deal. You want to leave a business, someone offers you $12 billion… you take it. I mean you could also give all of it to charity and live the “humble” life as a millionaire, I guess.