Kids today don’t buy lottery tickets. They launch startups. The news is obsessed with the story about how Facebook just bought WhatsApp, with a mere 50 lucky employees, for $19 billion. For those who haven’t downloaded a calculator app because their paychecks don’t have enough 0’s to make it worth the trouble, that’s about a third of a billion dollars per employee. Of course, the financials are a bit more complicated than that.
First of all, the deal hasn’t gone through yet. There are all kinds of approvals that need to be secured first so the deal probably won’t close until 2015.
Second of all, it is only $4 billion in cash and $12 billion in Facebook stock, which is still a good deal on the boards right now. The other $3 billion will be future stock, paid gradually over 4 years, so the party will have to wait on that. The average WhatsApp employee owns about 1 percent of the company and the rest is held by founders and angel investors. That works out to be about $160 million per clock watcher and only $40 million of that will be immediately spendable in Vegas. Still, that’s a pretty sweet deal for people who went to work every day wondering whether their company would still be in business when they got there.
In recent years, M&A activity among startups has made multi-millionaires out of average people many times over. This is a trend we can really get behind. As small companies grew into acquisition targets for huge amounts of money, we saw a host of hardworking techies become instantly rich.
Consider these 8 Powerball-sized business deals, featuring startups that won the tech lottery.
Expect to see many more mergers and acquisitions in the $19 billion price range in the near future, and many more “Limos only” parking spaces in they employee lots.