When Good Technologies was acquired by Blackberry in 2012 for $425mn, thanks to the preferential shares options, employees were wiped off of all the big dream$. The founder however made a little money but for a company that was once valued at more than $1Bn, this was a sore deal.
The worst affected were employees who even paid up tax on these share values when it was peak.
Sounds like a normal startup story, right? Well, yes.
But what the founder, Ken Singer did next is an inspiration to all founders who are reading this.
He is now investing all that he earned in his ex-colleague’s startups.
Those employees who had the greatest faith in the company–who had purchased their stock options–ended up with worthless stock and substantial tax burdens. The executives who were responsible for taking the company public but failed, walked away with millions.
The executives who were responsible for taking the company public but failed, walked away with millions.
Since the announcement of the Blackberry acquisition of Good Technology, I’ve tried to make contact with many of you. Like most Good shareholders, I was caught off guard by the acquisition announcement in September. I was even more surprised by the financial terms of the transaction when they were finally released. But more importantly, I was embarrassed by what I read in the press of who benefited from the outcome. Those employees who had the greatest faith in the company–who had purchased their stock options–ended up with worthless stock and substantial tax burdens. The executives who were responsible for taking the company public but failed, walked away with millions.
As a co-founder of a company that was purchased by Good, I ended up somewhere in the middle. I would not walk away with millions as once hoped. But my stock did provide a payout. This has left me in a moral dilemma. I could not in good conscience accept a payout when AppCentral employees would in effect be paying for it. Many of you turned down big name companies to join our team when it was just two guys in an attic in Berkeley. Into this high-risk endeavor, you invested your careers, your brilliance, your youth and your faith and commitment–collectively, you WERE the company. It would be unconscionable if this experience were to turn you completely off from working in another startup.
So to encourage you to use your talents for something big in the next 24 months, I’ve decided to set aside the entire amount of my earnings from the acquisition into a fund to invest in the most promising startups created by you, the former AppCentral team members. Of course your idea has to be big, viable and inspired–you know how high my standards are. When you’ve got market traction and think you’re ready, come find me–I’m always on campus. And to the other former Good employees, your efforts and talent should not go unnoticed either–come see me when your startups need support and angel investment.
I know my actions only amount to a small gesture. So I’d like to call on all the former leaders of Good Technology to join me. I hope you will invest in your team members as they’ve invested in you.
Finally, I did not intend to make this letter open until I read the recent New York Times article, “When a Unicorn Start-Up Stumbles, Its Employees Get Hurt.” I read it as an indictment of “startup culture,” which is generally accepted as brutal and often unfair. But the thing about culture is that we are all part of it. We are all responsible for its values and we can change them by choosing to reject what is readily accepted as normal. I refuse to participate in a compensation scheme that rewards only those who make decisions while taxing those who do all the work. I refuse to buy into the notion that as a founder, I deserve compensation when my employees received nothing (or worse). And I refuse to allow the end of our story to be about greed and the death of a unicorn. Team AppCentral, we are a phoenix–I will join you and your ventures when you’re ready to rise again.
Proud co-founder of AppCentral
Listen up founders : Being Good Is Not A Statement. Your Action Speaks For Itself.