1) If they were doing well and got a $30m buyout offer, they'd probably have gone out to raise more money for a much higher valuation. Money is cheap, and if they have an offer in that range, a VC would probably cut them a check within an hour.
2) Buyouts generally benefit founders & investors, and common stock holders don't get much. They'll get a retention bonus or something depending on how important they are deemed, but other than that, unlikely that they'll walk away with what their on-paper ownership seemed to be worth.
I'm fairly jaded on this mostly from having watched friends get giddy about their company being acquired, then getting their paperwork and realizing that their stock is now worth $0, and if they want their $100k bonus, it's distributed in a back-loaded earn-out over 4 years (sometimes with conditions that they hit certain targets that aren't realistic). I've seen it happen (again, to friends/acquaintances) in most price points (~$5m, ~$50m and ~$100m), unfortunately.
Granted it's anecdotal, so I could be very wrong! But in general I think common shareholders are wiped out.
Good post. Everyone on HN should remember that even if you are lucky enough to work as an early employee for a startup that got acquired, you shouldn't expect anything. That makes the normal tradeoff that's asked of early startup employees make even less sense than it already made (no sense).
It seems the real way to get a payday is to bootstrap a consultancy, build it up over a few years, and save your money. Eventually, you can transition to a product company if you're still interested in that. This is what Fog Creek, 37Signals, and several other prominent companies did.
You can do stuff your way, on your terms, and make products the way you want without meddling VCs jumping down your throat. You can get paid as quickly as you can get clients and no one will be yelling at you for paying yourself more than $50k or working less than 70 hours per week.
I would implore all the devs currently in the startup rat race in SV to consider this as a reasonable alternative option. The people who get mind-blowingly rich in these transactions are primarily the investors, sometimes the founders, and only exceptionally rarely any of the employees.
1) If they were doing well and got a $30m buyout offer, they'd probably have gone out to raise more money for a much higher valuation. Money is cheap, and if they have an offer in that range, a VC would probably cut them a check within an hour.
2) Buyouts generally benefit founders & investors, and common stock holders don't get much. They'll get a retention bonus or something depending on how important they are deemed, but other than that, unlikely that they'll walk away with what their on-paper ownership seemed to be worth.
I'm fairly jaded on this mostly from having watched friends get giddy about their company being acquired, then getting their paperwork and realizing that their stock is now worth $0, and if they want their $100k bonus, it's distributed in a back-loaded earn-out over 4 years (sometimes with conditions that they hit certain targets that aren't realistic). I've seen it happen (again, to friends/acquaintances) in most price points (~$5m, ~$50m and ~$100m), unfortunately.
Granted it's anecdotal, so I could be very wrong! But in general I think common shareholders are wiped out.