A Smart Bear: Startups and Marketing for Geeks

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How to think about cash vs. equity compensation

A Smart Bear: Startups and Marketing for Geeks

It’s among the most-asked questions on startup forums, and an issue we’re dealing with right now at WPEngine as we bring on new employees: How do you decide how much equity (shares) to give a new employee or partner? The question is further complicated when the new hire is getting a salary. What about $Y/mo?&#

Equity 276
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WP Engine passes $100M in revenue and secures $250M investment from Silver Lake

A Smart Bear: Startups and Marketing for Geeks

This week we closed $250M in financing from Silver Lake , the premier technology private equity firm. Every day, 5% of the entire online world visits a customer running on the WP Engine Digital Experience Platform. The majority of the funds pay back our early investors who believed in us enough to trust us with their money.

Engineer 152
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No wait, of course THAT is the single most important SaaS metric

A Smart Bear: Startups and Marketing for Geeks

It’s also by far the greatest determinant of equity value, because it maximizes both revenue and the revenue multiple. Fast growth proves every other piece of the company is healthy, or at least healthy enough not to be fatal.

Metrics 270
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More money if you do, more money if you don’t

A Smart Bear: Startups and Marketing for Geeks

It’s not a ruse devised by greedy vulture capitalists vying for extra points of equity. “Always raise more money than you think you need.” ” – people asking you to take their money Actually, they’re right. You do need more money than you think.

Revenue 270
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Should I invest my savings in this startup?

A Smart Bear: Startups and Marketing for Geeks

In short, your $95k investment buys you far more equity than your time does, whereas your time is much more valuable to you than your money. Now you need a potential payout of at least $395k ÷ 0.15 = $2.6m, but with 10% of the company that’s an exit of $26m in four years, which sounds quite reasonable.

Salary 229
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Startup Fitness

A Smart Bear: Startups and Marketing for Geeks

I have a ready excuse for squeezing in a little “sweat equity” — I need to get in shape to know my customers’ issues. But take this too far and your productivity drops off the cliff. As founder of a run/bike app startup, I can write off my workouts. However, I also know firsthand that exercise increases total productivity.

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The rise of the “successful” unsustainable company

A Smart Bear: Startups and Marketing for Geeks

After all, before the house of cards inevitably tumbles, private equity investors get a tidy return. And the same thing happened after we sold IT WatchDogs in 2005. The crap of it is, those VC’s who continue to invest in Nguyen are acting rationally. Nguyen knows how to keep the magic going long enough for the payday. And it is magic.

IPO 240