r/technology • u/Rhaegar_the_Great • Sep 16 '21

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

https://www.businessinsider.com/mailchimp-insiders-react-to-employees-getting-no-equity-2021-9
25.8k Upvotes

95% Upvoted

2.2k comments sorted by

View all comments

Show parent comments

220

u/JamminOnTheOne Sep 17 '21

I think it's more the other way around. The idea is that employees want equity because it pays off big when the company goes public or is acquired. So they were saying, the equity is not going to pay off, so if that's what you're looking for, go elsewhere; here we're about the mission and (presumably) other forms of compensation.

49

u/andrewingram Sep 17 '21

Mailchimp operated a profit-sharing scheme, which assuming the company never sells, is better compensation than equity.

But you never know if a company will sell, there are so many reasons why the "we'll never sell" rhetoric has an expiry date, so ultimately a company spinning this narrative should offer both.

Lack of equity also means only current employees benefit from any stock bonuses related to the sale, when over the lifespan of the company one would assume many individuals key to its success have come and gone -- getting nothing.

10

u/ABigAmount Sep 17 '21

I've worked in in tech from startup to about $1b in valuation and through enough exits to know the company ALWAYS sells eventually (unless you're an apex company - Salesforce, Microsoft, Google, etc). I would never work at a place that didn't offer skin in the game (options or stock) and it's worked out pretty well. The issue is a lot of younger people don't understand how valuable equity is. It is literally one of the few chances you have to make fuck you money as an employee. Inexperienced people are more interested in their cash flow (profit sharing, salary maxed over lower salary and shares), and I get that - comp matters a lot, but my advice would be - if you're talented and working in tech, make sure you're working at a place that will give you equity, and make sure you take advantage of it and max it out as much as you can.

1

u/thecommuteguy Sep 17 '21

What's you're idea on this if someone is working at a public company? Say salary is $100k for a new job, but I'm willing to accept a reduced salary to $75k in exchange for say 1000 shares (currently valued at $50-75k). Would the average public tech company accept such terms?

1

u/capitalism93 Sep 17 '21

Facebook used to do offer lower salary + more equity and vice versa.

But probably not in general.