DCSportbikes.net  
» Help Support .NET!
DCSportbikes Premier Membership for 25$ per year. Discounts! Click here for full information.

Now available in the .NET Shop:



Get your DCSBN Gear!
» Shoutbox
Sorry, only registered users have the ability to use our real-time shoutbox to chat with other members.

Register now, it's free!
» Online Users: 576
0 members and 576 guests
No Members online
Most users ever online was 4,519, September 2, 2015 at 03:26 AM.
Go Back   DCSportbikes.net > Non-Sportbike Forums > Non-Sportbike Chat

Reply
LinkBack Thread Tools
Give Me Back Your Pre-Ipo Shares, Or I'll Fire You.
Unread
  (#1)
Your Ad Here
 
Heist's Avatar
 
Posts: 32,590
Join Date: August 25, 2008
Location: Washington, D.C.
Give Me Back Your Pre-Ipo Shares, Or I'll Fire You. - December 2, 2011, 01:09 PM

I know there are a fair number of tech workers on the board who probably were in the middle of the start-up & tech boom in the late 90's, so this story may be of interest.
God knows, I've lost count of the AOL / WorldCom young 30's something millionaires who cashed out on their respective options and stock when the company was at its heights before their declines just after the crashes.



So, this ranks right up there with some of the scummies things I have ever seen a CEO/Owner try to pull. The CEO of game design company Zynga hired and lured talent under market rate during the start-up phase by giving them large equity and share grants.

This is nothing new or uncommon in the world of start-ups, especially in the tech world.
Workers end up taking 20-40% under market cash compensation rate in exchange for toilet paper.

The "carrot" for the employees is that company goes public or is bought out, the value of that toilet paper turns to gold, and the value of those shares are unlocked and they can cash out. I've worked like this for a decade at various companies. Some, I made a nice penny - some I ate my lunch and sucked up the lost opportunity cost and potential realized revenue.

For 5 years they worked under market rate, got the company off the ground, then helped make it successful. Chances are if you look at your tablet or smartphone, outside of Angry Birds, you probably have at least one Zynga developed game

Now that the company is finally going public - he is demanding that a number of employees whom he gave shares to, return a majority of them before the IPO or he'll fire them.

Talk about violating a sacred bond of trust between employee and company/CEO.
At best, this guy will probably see a mass exodus of workers and top talent knowing that he's a flake who just ran a flim-flam on them.

At worst, someone will try to catch him in a dark alley and try to knock his teeth out.

Either way, he is going to end up in a civil suit and probably Federal Employment suit for his actions.
================================================== ======================



SAN FRANCISCO—Zynga Inc. Chief Executive Mark Pincus often gave shares rather than high salaries to his top talent as he built his online-game start-up.
But as Zynga grew into a multibillion-dollar company with hot games like "FarmVille" and "Mafia Wars," Mr. Pincus appears to have developed giver's remorse.







Early last year, as Mr. Pincus began preparing to take Zynga public, he and several other executives decided the company had doled out too many stock rights to certain people in its early days, say people familiar with the matter. The executives chose an unusual solution: They began demanding that certain employees surrender some shares or be fired.

Those shares matter as Zynga approaches an initial public offering, expected this year, that could value it at close to $20 billion and make holders of large blocks of stock wealthy.


Zynga's demand for the return of shares could expose the company to employment litigation—and, were the practice to catch on and spread, would erode a central pillar of Silicon Valley culture, in which start-ups with limited cash and a risk of failure dangle the possibility of stock riches in order to lure talent.


Built into that arrangement is the chance that founders will later wish they hadn't given away so much stock, and also that some very early employees will end up with bigger windfalls than latecomers who contribute more to the company. Many in Silicon Valley cite an early-hired Google Inc. cook whose stock was worth $20 million after the firm's 2004 IPO.


Zynga attempted to avoid such pitfalls. In meetings last year, Zynga executives said they didn't want a "Google chef" situation, said a person with knowledge of the discussions.
The result was a list compiled by top Zynga executives of employees whose job performance might not justify their large grants of restricted shares, which are shares that are doled out free but don't immediately "vest" and become saleable. Some employees Zynga reviewed had total grants worth tens of millions of dollars. Demands to return stock, however, applied only to portions of not-yet-vested share grants.


One list that Mr. Pincus kept, said people familiar with it, was known as his MIA list, for executives who did so little he considered them "missing in action."
Zynga declined to make Mr. Pincus available for an interview.
Andrew Trader, one of the first people Mr. Pincus brought in when he decided to found Zynga in 2007, eventually ended up on a broader list of people the CEO felt might have too much restricted stock, according to a person with knowledge of the list......



“Any man who tries to be good all the time is bound to come to ruin among the great number who are not good. Hence a Prince who wants to keep his authority must learn how not to be good, and use that knowledge, or refrain from using it, as necessity requires”.

- Nicolo Machiavelli 1469-1527

  Facebook Page MySpace.com Page Send a message via AIM to  
Reply With Quote
Unread
  (#2)
SRWJTS SGT-At-Arms
 
Fitz's Avatar
 
Posts: 17,473
Join Date: October 1, 2002
Location: King George, VA
December 2, 2011, 01:11 PM

You are surprised that the head of the company responsible for Farmville is a total douchebag faggot?

Hell, i expected him to be a child molester


-Fitz

2016 Harley Softail Slim S
2012 Harley Ultra Limited in Ultra Annoying Orange Sold!
2012 V-Strom 1000 Sold!
2009 Buell 1125R Sold!
2005 Superhawk Sold!
2001 Superhawk Abandoned!
1981 CB650C Destroyed!

Brace Yourselves... the cries of "It's too cold to ride" are coming...
  Send a message via AIM to  
Reply With Quote
Unread
  (#3)
Suddenly Superstitious!!!
 
MudDawg's Avatar
 
Posts: 5,391
Join Date: August 25, 2004
Location: Dulles
December 2, 2011, 01:27 PM

Yeah, the term "in good faith" comes to mind. They will seriously lose in court...and then have to pay damages. They only way around it is to buy out people or fire them for cause. And after this became public...any lawyer will be drooling to represent people let go from Zynga.

And don't let them fool you. Salarys aren't 40% under market unless the person is an idiot. You get *maybe* 5% under market...at best. But you work them long hours. That's the typical startup MO. They know they will lost 70% of the staff due to overwork. But they don't care. It's all about the IPO.

I worked at a company like that for a while. 2000 hours in 8 months...and I found another job with better pay, fewer hours, and less drama. Now that company is basically gone. Fairly typical. Stock Options are toilet paper until they vest and the company has gone public.


I want my baby back, baby back, baby back....Chileeeeee's bay back...
  Send a message via AIM to Send a message via AIM to MudDawg  
Reply With Quote
Unread
  (#4)
Your Ad Here
 
Heist's Avatar
 
Posts: 32,590
Join Date: August 25, 2008
Location: Washington, D.C.
December 2, 2011, 01:30 PM

Quote:
Originally Posted by thefitzvh View Post
You are surprised that the head of the company responsible for Farmville is a total douchebag faggot?

Hell, i expected him to be a child molester



“Any man who tries to be good all the time is bound to come to ruin among the great number who are not good. Hence a Prince who wants to keep his authority must learn how not to be good, and use that knowledge, or refrain from using it, as necessity requires”.

- Nicolo Machiavelli 1469-1527

  Facebook Page MySpace.com Page Send a message via AIM to  
Reply With Quote
Unread
  (#5)
Groping is a skill...
 
turkishexpress's Avatar
 
Posts: 14,997
Join Date: May 3, 2008
Location: Chicagoland
December 2, 2011, 01:36 PM

Quote:
Originally Posted by thefitzvh View Post
You are surprised that the head of the company responsible for Farmville is a total douchebag faggot?

Hell, i expected him to be a child molester


2015 KTM Super Duke 1290 R
2013 Victory Vision Tour
K7 Gixxer 600 - Track Only
RnR Cycles Touched & Tuned


I grope suckaz!!! -
  Facebook Page Send a message via AIM to  
Reply With Quote
Unread
  (#6)
Your Ad Here
 
Heist's Avatar
 
Posts: 32,590
Join Date: August 25, 2008
Location: Washington, D.C.
December 2, 2011, 01:44 PM

Quote:
Originally Posted by MudDawg View Post
Yeah, the term "in good faith" comes to mind. They will seriously lose in court...and then have to pay damages. They only way around it is to buy out people or fire them for cause. And after this became public...any lawyer will be drooling to represent people let go from Zynga.

And don't let them fool you. Salarys aren't 40% under market unless the person is an idiot. You get *maybe* 5% under market...at best. But you work them long hours. That's the typical startup MO. They know they will lost 70% of the staff due to overwork. But they don't care. It's all about the IPO.

I worked at a company like that for a while. 2000 hours in 8 months...and I found another job with better pay, fewer hours, and less drama. Now that company is basically gone. Fairly typical. Stock Options are toilet paper until they vest and the company has gone public.
5% under market value? At a start-up? No way. You must have gotten very fortunate to find one that was paying you direct compensation at only 5% under market.

One start-up I worked for the market rate for my position was ~$80-90K a year.
They were offering $65K, $5K bonus for hitting certain key financial targets, 30K options vesting over 3 years (10 a year), 5K share grants which immediately vested after the 1st year.

I knew the 35K option/shares essentially represented toilet paper by I was willing to take the risk.

But to your point, I did put in a investment banker hours. I lost count of the times I slept at the office, literally, under my desk on a Friday night to be ready for a Saturday/Sunday all night and dayer. We ordered so much Chinese Food, the delivery guy invited our group to his baby's christening.



“Any man who tries to be good all the time is bound to come to ruin among the great number who are not good. Hence a Prince who wants to keep his authority must learn how not to be good, and use that knowledge, or refrain from using it, as necessity requires”.

- Nicolo Machiavelli 1469-1527

  Facebook Page MySpace.com Page Send a message via AIM to  
Reply With Quote
Unread
  (#7)
Air-Cooled Goodness
 
Desmo's Avatar
 
Posts: 1,007
Join Date: August 31, 2010
Location: Alexandria
December 2, 2011, 02:29 PM

Tell him he can keep his job. and I'll keep my shares. Start hosting minority shareholder's meetings and bring Milken out of retirement. Then shortly after the IPO there will be a LBO.


-Tommy
  Send a message via AIM to  
Reply With Quote
Unread
  (#8)
Your Ad Here
 
Heist's Avatar
 
Posts: 32,590
Join Date: August 25, 2008
Location: Washington, D.C.
December 2, 2011, 02:56 PM

Quote:
Originally Posted by Desmo View Post
Tell him he can keep his job. and I'll keep my shares. Start hosting minority shareholder's meetings and bring Milken out of retirement. Then shortly after the IPO there will be a LBO.
BINGO! Great idea.

Milken and Icahn.
File a Schedule 13F
Have a greenmail gang bang party.

This guy just bent over and opened up his asshole, and he has no idea that he just did.



“Any man who tries to be good all the time is bound to come to ruin among the great number who are not good. Hence a Prince who wants to keep his authority must learn how not to be good, and use that knowledge, or refrain from using it, as necessity requires”.

- Nicolo Machiavelli 1469-1527

  Facebook Page MySpace.com Page Send a message via AIM to  
Reply With Quote
Unread
  (#9)
Suddenly Superstitious!!!
 
MudDawg's Avatar
 
Posts: 5,391
Join Date: August 25, 2004
Location: Dulles
December 2, 2011, 04:20 PM

Quote:
Originally Posted by Heist View Post
5% under market value? At a start-up? No way. You must have gotten very fortunate to find one that was paying you direct compensation at only 5% under market.

One start-up I worked for the market rate for my position was ~$80-90K a year.
They were offering $65K, $5K bonus for hitting certain key financial targets, 30K options vesting over 3 years (10 a year), 5K share grants which immediately vested after the 1st year.

I knew the 35K option/shares essentially represented toilet paper by I was willing to take the risk.

But to your point, I did put in a investment banker hours. I lost count of the times I slept at the office, literally, under my desk on a Friday night to be ready for a Saturday/Sunday all night and dayer. We ordered so much Chinese Food, the delivery guy invited our group to his baby's christening.
It depends on your level, the local market, and desired skills. I've got about 20 years of hardcore development experience, leading teams, etc. The market around DC is good for techies. I wasn't leaving AOL for a pipe dream and a huge pay cut. They knew that. I got a raise form my base pay, but about 5% below my yearly total for pay & bonus. (Then again, AOL stopped paying bonuses the next year....so I laughed.)

My brother went to a company and was happy about the options. But they weren't public yet, he didn't have tons, and the market growth for them wasn't looking great. He left in about 18 months. Same deal, too many hours, too much BS about making the company profitable for the head guy (Who didn't work long hours.) by working so much, and just no reasonable upside for his investment in time & effort.


I want my baby back, baby back, baby back....Chileeeeee's bay back...
  Send a message via AIM to Send a message via AIM to MudDawg  
Reply With Quote
Unread
  (#10)
5 yrs till Brood X emerge
 
morsetaper2's Avatar
 
Posts: 1,466
Join Date: June 17, 2007
Location: Gaithersburg, MD
December 2, 2011, 08:17 PM

WTH is Farmville?

Oh yeah, that's what facebook faggots play... LOL .... snicker snicker
  Send a message via AIM to  
Reply With Quote
Unread
  (#11)
Ton Up!
 
Naked_Biker's Avatar
 
Posts: 5,381
Join Date: July 8, 2009
Location: D.C.
December 2, 2011, 08:19 PM

Fuck the job, keep the shares.


~Justin

FREE FITZ!!!!

1999 Suzuki SV650
1982 Kawasaki GPz550 : RIP 4/16/09
1971 Honda CB450 : SOLD!
  Send a message via AIM to  
Reply With Quote
Unread
  (#12)
Suddenly Superstitious!!!
 
MudDawg's Avatar
 
Posts: 5,391
Join Date: August 25, 2004
Location: Dulles
December 2, 2011, 08:22 PM

You generally lose the shares when you leave the job. Sometimes you have a grace period after you leave. But unvested shares are gone, which is what they are fighting about. So he's basically threatening their jobs unless they give back granted options set up to induce them to work for the company. I don't see how this could ever work out for them? Evidently they have diluted the stock to the point that somebody (investors most likely) aren't happy with the after ipo profit.


I want my baby back, baby back, baby back....Chileeeeee's bay back...
  Send a message via AIM to Send a message via AIM to MudDawg  
Reply With Quote
Unread
  (#13)
Chicken strips R US
 
geoff2k's Avatar
 
Posts: 24
Join Date: May 26, 2011
Location: Annandale, VA
December 2, 2011, 08:28 PM

What makes the current generation of startups much more interesting are sites like secondmarket and sharespost which provide a pre-IPO market for private company shares and allows early employees to not keep quite all of their eggs in the same basket.
  Send a message via AIM to  
Reply With Quote
Unread
  (#14)
SPANNERWRENCHCLICKCLICK
 
Jw626's Avatar
 
Posts: 3,308
Join Date: June 28, 2011
Location: Catonsville
December 2, 2011, 08:50 PM

I usually delete friends/family who play these games, i dont like being invited to shit


[SIGPIC]http://www.griseldaonline.it/foto/6galleria/tradimenti/warhol%20last%20supper%201986.jpg[/SIGPIC]The tragedy of life is not that it ends so soon, but that we wait so long to begin it.

  Send a message via AIM to  
Reply With Quote
Unread
  (#15)
SRWJTS SGT-At-Arms
 
Fitz's Avatar
 
Posts: 17,473
Join Date: October 1, 2002
Location: King George, VA
December 2, 2011, 10:53 PM

Quote:
Originally Posted by Jw626
I usually delete friends/family who play these games, i dont like being invited to shit
This


-Fitz

2016 Harley Softail Slim S
2012 Harley Ultra Limited in Ultra Annoying Orange Sold!
2012 V-Strom 1000 Sold!
2009 Buell 1125R Sold!
2005 Superhawk Sold!
2001 Superhawk Abandoned!
1981 CB650C Destroyed!

Brace Yourselves... the cries of "It's too cold to ride" are coming...
  Send a message via AIM to  
Reply With Quote
Reply


Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On


Powered by vBadvanced CMPS v3.2.3


Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2019, vBulletin Solutions, Inc.
Search Engine Friendly URLs by vBSEO 3.6.0
vBulletin Skin developed by: vBStyles.com
All logos and trademarks in this site are property of their respective owner. The comments are property of their posters, all the rest © 2002-2010 by DCSportbikes.net. DCSportbikes.net is owned by End of Time Studios, LLC.