WePay's (YC S09) next chapter(blog.wepay.com) |
WePay's (YC S09) next chapter(blog.wepay.com) |
It's also hard to figure out what WePay has actually been doing. Great enterprise speak again.
So, that's what the banking world looks like? Even more enterprisy than the Enterprise despite being a start-up?
Between my quote "hi guys, we've been bought" and this statement, you can see the difference, right? One is very clear to the point, the other talks about lot of things but actually doesn't literally spell it out once.
Curious as it seems to me (uninformed) that basically all banks already have fintech offerings and are built around networking and payments technology at their core.
Unfortunately I'd say yes. Consider that Goldman Sachs has 38,000 employees and the average compensation is 350k-400k per year, per their recent quarterly filing.
It is an elite world based on signaling and deep relationships, because there is a lot of money at stake.
I’m writing all this because I left with the feeling that he was a genuinely great guy and that he deserved success. I’m glad it has finally come his way!
Best of luck!
PS: stay away from bitcoin.
> It's just not a real thing, eventually it will be closed,
> Dimon also said he'd "fire in a second" any JPMorgan trader who was trading bitcoin, noting two reasons: "It's against our rules and they are stupid."
A materialized gain that you can actually use is more valuable than a paper gain that may not be there when you need it, especially in an instrument as volatile and immature as Bitcoin.
It's pretty clear it wasn't the home run that so many set out for when founding a company. I do expect this is a good landing out of this for many, yet now there are new challenges to navigate.
Nine years is no short time to labor through, especially when you're taking a giant risk and giving up things that software engineers could easily get in terms of work/life balance at an AWS/Google/Microsoft. Yet, you set out to change something in a noticeable fashion.
I truly hope Chase gives you the chance to do that, yes it's a big company. But, in the spectrum of big co's in the financial space they seem more open to innovation than so many others so... best of luck with what's next at Chase.
This isn't to say it's a bad acquisition or should be dismissed as a failure. It just re-iterates that it's not all easy, glory, and success.
I do hope for the team involved it worked out just as they'd hoped, but from their post it feels like many hard years and more of a next chapter than the end. Best of luck to them all in the future.
So what does this mean for Chase? Do they gut all of the plumbing out with Vantiv and move it over to Paymentec for processing? Does Paymentec even have a PayFac capability built into it?
What the parent is describing is PayFac (payment facilitator) which is where the card network and acquirer are aware of the merchant/sub-merchant relationship. You can determine if a payment is through PayFac by the tell-tale asterisk after the first 2 characters on the statement descriptor. For example, Square transactions process as "SQ*[Merchant Name]"
Huge congrats to the team!
One feature that stood out for me was the ability to issue refunds without fees. It was not common a few years ago. This allowed me to build an event ticketing platform where promoters could sell tickets. If an event is cancelled and we had already paid out funds to the promoter, my business could have been 'on the line' for the refunds.
Even though we were never a huge customer, the business didn't succeed, they still always treated us like we were important. This was a stark contrast to PayPal, whom they were originally trying to take down.
I suspect this merger is also about their fraud detection system. I hope Chase can put it to good use, they need it.
WePay is about providing payments infrastructure to marketplaces and crowdfunding platforms (Lyft, GoFundMe, etc.). WePay are competitive with Stripe's Connect product (disclaimer: my employer). Braintree and Adyen also have similar products.
Congrats to the WePay folks. I hope this new chapter works out well for them!
I'm surprised that Zelle is moving so slowly - it's a great selling point for a bank/CU. Alas, the system doesn't allow for non-personal payments, so the banks want to preserve their commercial payments processing income.
Also, Zelle and WePay are in two completely different spaces. Zelle is consumer-to-consumer money transfer. WePay is a merchant payment processor.
Just nice, smart, unpretentious guys.
Congrats.
They were kind, warm, quick with a joke, and even quicker to offer support, insight, and help to the fledgling group of young entrepreneurs.
I've taken vicarious delight from watching their success!
Uh, oh. Does such a thing ever work?
In the automotive world, everyone has a bet on self driving cars, for instance. Ford has Argo AI, GM has Cruise Automation.
For a contrast, look at Kodak. They pioneered the tech for digital camera sensors... and then did nothing with it, because they made money on film. Digital camera sensors killed film.
If you want a longer discussion on this, The Innovator's Dilemma is highly recommended. Here's a short summary: https://www.youtube.com/watch?v=yUAtIQDllo8
Source: 12 years of experience processing cards in CNP/MOTO environment.
This has literally nothing to do with what I originally posted.
Source: The parent comment.
What do you think of my estimation?
Hint: its a lot more than 45k
My point is that while the "average" compensation may be $400k, that's going to account for a very small percentage of the employees. The median is probably well below $100k, dependent largely on just how many support staff there are compared to traders. And even the traders who only last a year or two before getting fired will probably only make $100-150k.
[0] https://www.glassdoor.com/Salary/Goldman-Sachs-Salaries-E280...
How dare you tell me "hint, blah blah blah" when your source literally confirms what I have stated.
The young and inexperienced workers are just there for data entry and errands for the SMALL percentage of workers who are high powered investment bankers.
It is often a thankless job and I appreciate that you've provided these numbers. It really shows the income disparity between the top dogs and the unwashed masses and Goldman.
FB and WhatsApp are once-in-a-decade type returns. In baseball parlance perhaps a World Series winning grand slam or a perfect game. You needn’t exit for $19B for it to be a great outcome.
The top line acquisition price is probably the full package including costs and retention bonuses, not all of which will be paid out. The only people who will get something for their time are the founders, but they're probably looking at low to mid 8 figures at best.
The "top line" number can mean a lot of things though; it almost certainly includes the assumption of hitting several targets, some of which are reasonable and some are probably stretches. It's also a very real possibility that the "real" cost that Chase paid was just the right amount to make the common stock evaporate; investors get their money back such that $0 is split amongst common stock. Employees then are given a sheet to sign saying that their stock in WePay is now worth $0, but here's an offer for Chase stock vesting over 4 years.
Anecdata, for sure, but most of the deals I've seen have been something like this. The top-line number is all well & good, but the real dollars people extract from it are invariably less (again, just in the limited set of things I've seen). I'm sure there are exceptions (I bet the Instagram folks did just fine). But if I had to make a guess, it'd be that the founders will come out with a good chunk of cash, and employees will get a job at Chase out of it (with the valued employees getting a nice bonus at the "new car money" level)
Would you mind elaborating on this? What causes the common stock to "evaporate" exactly? Is this a side effect or is this intentional?
>"Employees then are given a sheet to sign saying that their stock in WePay is now worth $0, but here's an offer for Chase stock vesting over 4 years."
For an the average rank and file employee who has been grinding it out at Wepay through the ups and downs I am imagining this might not be a "feel good" moment.
This would mean something like paying exactly what the valuation at the last round was, such that it'd cause the cap table to unwind leaving precisely $0 to split amongst common stock. It's not a huge win for investors, but if it's clearly not going to be a huge win, they get their money back (plus whatever conditions they had for more), and can move on.
> "For an the average rank and file employee who has been grinding it out at Wepay through the ups and downs I am imagining this might not be a "feel good" moment."
Probably not. I've had friends who have been at companies that have sold at these "big numbers", but come to the sad realization that the numbers aren't "real" (e.g. their 1.5% stake of $250m is worth $0). I'm sure it's a weird feeling to see the "congrats!" messages! However, the "retention bonus" of $100k over 4 years on top of their salary is usually enough to keep people from burning the place down (being facetious).
The retention bonus is nice provided you don't mind working for a Goliath bank I guess.