Tumblr’s $1.1 Billion Pie Divided Up, Criticism Ensues


The 178 staff members of Tumblr—all of them—will get a slice of that $1.1 billion deal with Yahoo. That’s at least $371,000 each due to stock options says Crains New York—nothing to sneeze at. The first 30 employees are look at an average of $3.3 million while the first 10 will snag $6.6 million. Then you have the three members who were part of their editorial team starting in May 2012 that won’t get a slice of that pie. They were released just last month.

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 With such a situation, there are bound to be rumbling about “The right thing” and the three former employees’ eligibility for a slice. Take Editor-in-chief Chris Mahoney and executive editor Jessica Bennet. They rolled onto the scene in February 2012—a mere three days before the three editors were hired. That put them in the radius of Yahoo’s $1.1 billion cashplosion.

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Marco Arment was the first Tumblr employee and left the company to form Instapaper, a service that allows users to save webpages for reading at a later time. It sounds like a more organized version of simply bookmarking or pinning tabs, but apparently it has plenty of users. In any case, Arment managed to get seven figures from the deal and intends not to blow his Tumblr-Yahoo gained fortune and invest wisely.

PrivCo, dropped a few big numbers on big Tumblr investors and the weight of the ducats they are walking away with. The New York-based Union Square Ventures—as well as the Boston-based Spark Capital as well as partner Bijan Sabet—put in $13 million each total for Tumblr. The total each looks to be $192 million—which is altered from the original $253 million for USV and $154 million for Spark Capital.

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California’s Sequoia Capital will see a 700% return from a 2010 investment as they snag $176 million from the $1.1 billion. PrivCo CEO Sam Hamadeh said that the bulk of the $1.1 billion investors have gotten will be used to start companies and to finance the next wave of potentially lucrative startup companies.

Several venture capitalists have voiced their disapproval of PrivCo’s reporting of the numbers including Fred Wilson, a managing partner in Union Square Ventures. To Hacker News he stated that the figures were “Total garbage. There is not one fact in this privco thing that is close to right. The numbers are good but nowhere close to that good. This is the same firm that predict Foursquare would be out of business this year which will also prove to be nonsense.”

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Via Twitter Bijan Sabat chimed in with similar commentsTumblr's $1.1 Billion Pie Divided Up, Criticism of Initial Reports Ensues “That article and corresponding privco report is complete garbage and incorrect.” On Twitter, Business Insider writer Alyson Shontell said “How is PrivCo allowed to exist and how has it not been sued to death by all these terrible, false reports?”

PrivCo fired back at the criticism, but later took down the tweets and cleaned up their numbers.

Starting with Kabir News in 2013, James has focused on tech, gaming, and entertainment. When not writing, he enjoys catching up on sci-fi and horror shows and comics. He can be followed on Twitter @MetalSwift.

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