Facebook has made smashing headlines all around the tech industry for the last two days, thanks to its acquisition of WhatsApp. Analysts now reveal that early Whatsapp employees stand to get as much as $160 million or more as a part of the $19 billion acquisition deal.
The exact deal between WhatsApp and Facebook comprises of Facebook offering $12 billion in stock, $4 billion in cash and $3 billion in stock grants for the WhatsApp employees. Let’s forget the $3 billion in stock grants, which will also go to the employees.
Rather, let’s talk about the rest of $16 billion. Most startups typically give their early employees a tiny equity share as part of their pay, since they don’t really get a good enough compensation in the days when a new product or company is being built. If the startup eventually turns out to be successful, this translates to a huge return on this equity share. But if the startup fails to take off, you end up with no cash and no value for these shares.
The good thing for early WhatsApp employees is that Facebook has acquired the company at an exceptionally huge price. This has instantly made any WhatsApp share holders millionaires. According to a report, early WhatsApp employees have large equity share of nearly 1%. This simply means that of the $16 billion that Facebook will give WhatsApp, they stand to get a whopping $160 million! Next time you want to make it big, try hooking up with a promising startup, even if they only offer a meager recompense.
Courtesy: Business Insider