Former Skype Employees got nothing from the PE Exit – Lessons Learned?
A guest columnist for the New York Times DealBook recently did a piece on Venture Capital vs. Private Equity in relation to Skype and what the exit meant for former employees (i.e., they got screwed). Yee Lee, one of the former employees, received nothing from the exit under Silver Lake’s ownership, while he would have received close to $100,000 under the standard VC terms (on vesting). Lee’s Lesson Learned blog entry spells out why he was surprised when he received nothing from Skype’s exit and his thoughts on Private Equity.
The key takeaway: Always read the legal terms, hire legal representation if needed, and don’t assume a change in ownership means your terms of engagement & service remain unchanged.