Super long read. Hat tip to Amit for the link.
Lot of history in this – I am still grokking.
More from the Verge :: https://www.theverge.com/2019/4/5/18297619/amazon-eero-price-fire-sale-mesh-wi-fi-buyout
Not all exits are exits. 😉
Hardware is hard.
Now on to the mechanics.
Hard to know all the specifics but this is a common tactic when a large company acquires a smaller one. One way to buy something is pay enough money for it that all the investors, employees and founders make money. This could be a considered a normal deal but when a company isn’t doing well and owes money then lots of other things could happen.
What the deal looks like is Amazon paid just enough to get a deal approved and then incentivized the founders to take a lower overall price but made it up to them in their new employee deal. VC’s are pretty aware of this and early stage paperwork is sometimes drafted that tries to deal with this but in later stages an exit is sometimes an exit.
Looks like only real early investors made some money and the core team getting spiffed to stay at Amazon will do okay.
A bunch of other investors and even worse, employees are getting screwed. Looks like some employees will have paid for their options and have nothing but losses to show for it. Options can be wicked, especially in the USA – where one could even being paying AMT on their options but never realize a gain.
The way the USA deals with options sucks since the core premise is they can tax you on unrealized gains. Painful.
Again – I don’t know the specifics but if the founders or core execs are eventually going to be minted and a bunch of rank & file got screwed – that’s bad. But let’s be honest. Lay that blame on the founders – not Amazon or the VC’s since the founders ultimately accept the deal and they can negotiate or even give their pool or bonuses to the rank and file. That’s at their discretion.
Startups are hard and this is probably a more normal story than the ones of glorious riches and fame that we always seem to hear about.
Was talking to a friend about India and VC – one thing we all agree on is that the monster exit of Flipkart has done wonders for the scene. Lots of people made money and it is going to new firms and new startups which helps to compete with the old guard. More foreign funds will pay attention now knowing exits can and will happen.
However – making investors, founders and employees rich has nothing to do with Walmart turning Flipkart into a money machine.
On this part -I think they will struggle long-term against Amazon.
Get the popcorn.
Well this is a battle to watch.
Since Amazon Prime showed up that’s pretty much where I get my stuff – apart from going to the store or the wet market. Yes – that’s still a thing in Asia and I love it.
I get the other stuff I need from iHerb which has great prices and ships for free to Singapore. Can’t beat it.
I still very rarely wonder in the untamed marketplace that is Lazada or Shopee. I have tried them both for some weird stuff I couldn’t get elsewhere but generally are disappointed with the quality of it. For sure though the marketplace model of each holds very little interest from me so I am always amazed at the numbers for these products but of course not a lot of profit yet.
Then add in the while Carousell and Facebook stuff for lots of other P2P transactions which our family has used way more than Shopee or Lazada but both could be done so much better. I actually there is some opportunity in the P2P space being done right but maybe Carousell and FB are just too big now.
Anyways – welcome to SEAsia! Its gonna be a crazy next 10 years!
I’m not a huge fan of the product but I use it from time to time and it works, but let’s admit that Singapore is easy.
I used to use redmart but saw no reason to when amazon prime arrived. Personally I think it’s a mistake that they are rolling redmart into the platform but I am sure they have their reasons.
All that aside I think appointing Pierre is the right move and good to see Alibaba learning a trick or two. Pierre has the history and knows what he is doing. The competition will be stiff but I think having a founder in charge is a better look versus what it looked like Alibaba was planning to do.
Congrats and good luck!
Pierre Poignant will have to vanquish well-funded regional rivals if he is to achieve Alibaba’s vision of becoming a global player.
Wow. This is amazing.
America is run by such an ass with so many crooked friends.
I still think we will look back and mark the rise of the Trump as the beginning of the fall of America.
This is heavy.
Calling out their investor!
Bold but I agree with it.
It doesn’t have to be like this. You’re literally the richest man in the world. Markets have suspended disbelief for decades, and let you rule as you see fit. It’s well within your power and purvey to change course.
I like the grown prosper, invest, fix, grow, prosper mantra
Nothing is perfect but you have to start in order to have something to fix.
Lots of people will sit on the sidelines and complain or just armchair quarterback everything.
But I am a fan of grow, prosper, invest, fix, grow, prosper.
Interesting way for Amazon to play the free OTT game:
Amazon is expected to announce a free, ad-supported video service with libraries of past TV shows and movies. The offering, which is similar to The Roku Channel and Hulu, will let advertisers use Amazon’s first-party data to target advertising.
I rarely link to Forbes but Bezos.