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MailChimp: an inequitous acquisition

MailChimp is selling to Intuit for $12 billion. Importantly, seemingly because it’s a privately-held, bootstrapped company, it never gave stock options to its employees - so not a single one will see a penny from the deal.

If I was a MailChimp employee, I’d be pretty upset. Venture capital isn’t required to give employees stock compensation; they should have been given some ownership of the company.

To be fair, it offered profit-sharing instead: based on company performance, up to 19% of an employee’s salary was placed in their 401k at the end of every year. That’s not a bad deal as such, although it doesn’t lead to any extra cash in hand in the shorter term. But it was a better deal when it looked like the company was going to stay independent forever: its success is undoubtedly down to its employees, who should really see some upside. There’s a gross inequality here.

But gross inequality is par for the course. This compounds when you remember the allegations of sexism and racism at the startup. As The Verge reported back in February:

Employees say the company’s position as one of the premier startups in Atlanta allows it to view workers as disposable, as there are fewer tech jobs to choose from than if the company were located in San Francisco or New York City. They also say that because the organization is private and has never taken on outside investment, executives can operate without the specter of more public accountability.

It’ll be interesting to see how this changes once MailChimp joins Intuit. Granted, the new parent company recently faced a giant class action settlement from low-income workers who were duped into paying for its tax preparation software, so it’s not like MailChimp is being absorbed into the epitome of sweetness and equality. Nonetheless, as part of a publicly-traded company, it will face greater scrutiny than a privately bootstrapped tech startup.

Regardless, none of this will help its current employees during the acquisition. They’re doing fine - they’re relatively highly-paid tech workers, after all - but they may still be miffed that they missed out on capitalizing on a valuation that was based on their hard work.