Answer by Sae Min Ahn(안세민):

(Written 2014 Feb)

As of now, I think Whatsapp has many competitors as the base utility it provides – and executes very well – is so core for contemporary communication. But to me the core utility is also what makes its platform – or lack thereof – vulnerable to not siloed competitors but to ecosystem owners/proprietors.

Referencing the above, Whatsapp's biggest competitor will be Google, especially when users:
1. Change their Phone
2. Upgrade their OS
3. Versions of Google Play Services roll out

Currently, the tech giant is in the midst of laser focused, OS ecosystem-level consolidation of function, UX, and monetization platform.

To this, one of their largely unnoticed but critical modification – on KitKat – was giving users the option to set Hangout as the default SMS app. This "soft opt-in" is branded as an "improvement" but should strike a nervous chord with Whatsapp.

Here’s the full Google Hangouts 2.0 for Android changelog:

  • SMS & MMS (Android 4.0+): Send/receive text messages with Hangouts! You can import your existing messages, quickly switch between SMS and Hangouts, and start group MMS conversations.
  • Animated GIFs: send animated GIFs, cute kittens and all.
  • Location: share a location in your conversations.
  • Device, in-call, mood status: share what device you’re on, whether you’re on a call, or your current mood.

If you have a Nexus 5, Hangouts is your default text SMS app. Surprise!

https://www.youtube.com/watch?v=_i0-PMuUGBg
The same simplicity that enabled the platform to gain immense traction equally enables player like Google to build parity products which they can push to the entire Android userbase via Google Play Services.

As some indication, we see people talking about "Why Google Hangouts is now the preferred SMS app"

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Answer by Sae Min Ahn(안세민):

(Written 2014 Feb)

Google is an awesome company. Super smart people are abundant and people are engaged to work and get stuff done.

  • Growing pains

Google in the past 5 years I was there became a very different place. This is not a bad thing, it is a natural occurrence with any growing company. When I started I think we had about 12K employees and when I left that number neared 50K FTEs.

With this change in volume, 'fat' was bound to accrue in some places and calcification was/is seen in many of the internal organizations. Google lost a lot of flexibility in exchange for narrow, exacting execution with stability as a base.

I began to see our teams hire more externally for that particular segmented experience and disregard internal candidates. So for example if there was a possibility to go from Sales to Biz Dev 2~3 years ago, it's relatively much harder to do so in Google's current hiring mode.

I again have to emphasize that this is not necessarily a bad thing, just a natural knee jerk reaction towards risk aversion.

  • The Three Loves of one's Profession

For me there are personally three distinct traits that make a person stay in a company; love of company, team and job.

I absolutely love Google and the people who make it a living breathing organization. I can say with all candor, the goal of making products that strive for user happiness is genuine and is alive in the services and products the company makes.

I also loved my team. My then-BD-manager is very intelligent and hands off. She knows when to step in and help and that sense and instinct of rhythm is something that is very hard to find even in Google.

What made me leave was the job itself. Even though I loved it, the tipping point was not learning at the pace I wanted to. You can chock it up to impatience but it was a situation where I was on a very luxurious hamster wheel or gold-plated train tracks; I got to see how an amazing company builds out a product but also did not have enough of the control I strove for.

That lack of control and not being recognized for those "growth-hacks" I did to push product features over the top made me go crazy.

Anyway, that's just my two cents..
Ciao

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Answer by Sae Min Ahn(안세민):

Honestly, if it's a toss-up between the four, your work-life balance will be proportionate to:
  • How good at the job you are: Most of the people I've known throughout all four companies were/are quite over-qualified for their roles. To them doing X activities or setting up X OKR is a walk in the park
  • Who you know up the food chain: I can honestly say that even a place such as Google has become pretty darn political and knowing people higher up the chain of command really does make a difference in exercising a higher standard of work-life balance
  • What department you are in: If you are in Sales, chances are you'll chase the almighty incentive dollar all the way to Valhalla and back. If you're an engineer, you might end up having a lot of leeway to progress with your project and product until fit to ship
  • What country you are in: If you're on the sales team this really matters as no matter what you do you just can't catch a break. Google can be the best company in the world but as long as it's main base of revenue was search, it got clobbered in South Korea. If you're in the Engineering department, you'll end up fighting tooth and nail for a semblance of a good project and than fend off the Mountain View ravens trying to cull good product

That being said, if you're a person in the US and just want a blanket answer, Google's your uncle I guess… The worst as a blanket answer, I've heard MS too many times to ignore there's currently a universal issue with the company.

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Answer by Sae Min Ahn(안세민):

NOTE: Of the 400 odd term sheet+contracts I've seen in the past year have been predominantly Seed/SA/SmidB.

I have not seen a specific clause that is in reference to a departing CEO and to that extent, of a replacement action.

If you're asking about larger companies, yes you'll see very  senior officers being given specific employment exit packages for services renders/un-rendered.

A. Compulsory Transfer
What some contracts will have is something that is called "compulsory transfers" clauses relating to common stock shareholders who end up leaving for either voluntary or other reasons.

The clause essentially induces a founder/executive/non-executive/common shareholder to evacuate all his/her shares in the event said scenario takes place.

At said point and time, depending on: 1) Company A's vesting schedule/rule and 2) at what price the the compulsory transfer shares are executed essentially becomes the "compensation package" of the leaving CEO.

B. Permutations
It would be great if the story ended there but there are some other "standard permutations" the contract will contain to differentiate leavers under various circumstances.

In such a case, the contract would be broken down into a "good leaver" or bad leaver" shareholder.

What defines a "good" and "bad" can depend on:

  1. Whether departure was voluntary, if so what the exact reason was(health, conflict of interest raise either by home company or third party, etc)
  2. Whether departure happened under X period
  3. Whether departure was "involuntary", if so why said person was asked to leave(health, conflict of interest, immoral conduct, etc)

Good luck

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Answer by Sae Min Ahn(안세민):

For me there are a laundry list of things I look at before taking it to my board; from looking at P&L to understanding how the founders want to take the company to the next level, all manner of qualitative and quantitative data is smashed together to come to a decision.

But when I take away all the layers of justification on why or why not to invest, it kind of comes down to the below four things:

  • I can understand the product/service at not only a quantitative level, but that of an emotional one
  • I can translate and present that affinity for the product to my board without any loss of faith or enthusiasm
  • As soon as I , or shortly after I look at the product, I know and have the means to help the company do better(as in help them get more users, revenue, lower costs, hire strong employees, get them hooked up with great mentors, fix/improve product, etc)
  • The team just gets along naturally with one another and I – the VC – genuinely enjoy talking about the company and themselves

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Answer by Sae Min Ahn(안세민):

To preface, I think all VCs require a down-round protection – which could also be a weight average anti-dilution clause(ADC) – in one way or another but how it is expressed in the paperwork would differ slightly to vastly.

Depends on(the round size being locked at the aforementioned stage):

  • The track record of the entrepreneur: If the entrepreneur is a three time-'exiter', he/she probably knows the ins and outs of an investment contract and have enough contact in the industry to get liquidity where one would not have an anti-dilution clause applied. In such cases, the investment firm might want to apply strong restrictive covenants that give more authoritative power to said firm in deciding next round valuation and ROFRs.
  • The absolute liquidity volume compared to said VC's historical injection amount and fund size: If you're asking 500K USD – for a Series A syndicate round – from a fund that normally executes 3 MM USD, their risk profiles would differ greatly to VCs who have smaller investment rounds and need more fail-safes to make their LPs happy and give said investor some peace of mind.
  • Region the injection is occurring: The norm in term sheets and contracts can differ greatly from country to region to culture. I've seen full-ratchet ADCs implemented quite regularly for several LATAM deals I was looking at.
  • How familiar the VC is with engineering/optimizing the contract: Some investors will have a financial background but not specifically pertaining to a sustained CV in venture capital; this happens often to people who don't have a full time job investing in this specific market vertical/segment at this specific fund size. As such said investors will not fully grasp that said down-side protection can be expressed by tweaking different clauses around the contract.
  • Overall relationship founder/company has with investors: Some VCs would look at a product and know exactly how to help the company in the next couple of years. On top of that they already have a working relationship proving to the VC this company can go places. This actually happens more often than not with corporate venture capital firms where the relationship starts from a partnership and rolls into a strategic investment. In such cases to some VCs, debating an ADC would be a waste of mental energy and net-negative to the long term relationship.
  • The kind of VC firm that is executing: Depending on whether the founder is dealing with a commercial, corporate or strategic investment firm, their focus and need for a ADC will differ completely.

The above factors and more highly influence how VCs of different shapes, sizes, and kinds will either implement ADCs or implement other forms of risk mitigating levers.

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Answer by Sae Min Ahn(안세민):

Note: My bias is in the tech industry so I'm sure these inputs would be wholly inapplicable in other disparate verticals.

Let me take a stab at this. The term 'typical' might not be the most apt terminology to utilize as one might be able to guess – from the distinguished contributors to this question – advisory boards are currently not the most pragmatic route to funding.

To give you a subjective spin – of what goes on in Singapore, in the viewpoint of corporate venture capital facing advisory firms -, many dual wield multiple roles across several market segments.

A. So you sometimes have a sell-side advisory company looking:

  1. to unload some assets under a PE, IB banner
  2. trying to raise funds for startups

I experience this quite often – I would say about 15 in the past eight months – as one sees a firm looking for a buyer of company A and at the same time inquiring my proclivity for investing in X verticals.

B. In such cases the advisory firm's 'commission' for specifically funding X round varies vastly as some ask for:

  1. as little as .5% of the funding amount to as much as 10% – seriously, I'm not even kidding
  2. an equity stake for later liquidity events
  3. a weird exclusivity contract for them to be the sole broker for future X # of deals :S

Their value proposition – to the VC firms – is that the advisory orgs provide deal access, 'privileged' information, and they take care of the bulk of negotiations, etc the list goes on.

C. The only issue is – at least for my region:

  1. these guys are very bad at getting deal access; these investment banking or lawyer-types could never ever know more about what's happening on the ground than me. Because I am the dude on the ground talking to many of the startups every single day so whatever stupid 'teaser' profile they send me, I can not only figure out the company name but chances are I know the founders well
  2. information, through the magic of the interweb is extremely democratized so the bulk of their services and wisdom is accessible for free
  3. dovetailing on #2, for many of their capabilities, a better, cost-free option can be found through lawyers you work with, advisers you talk to
  4. as most if not all of the contributors have mentioned (9/12/2013), irrespective of whether or not the AF actually provides true, unadulterated value, the mere existence in the conversation brings a sort of knee-jerk negative reaction 
  5. no VC firm in their right mind would hand over negotiation work wholly to a thirdparty and neither should the founders

I hope this does not make you drop your advisory firm right away. I'm sure there are organizations that have truly helped great startups; I just haven't seen such an execution done in a successful, sustainable manner.

Good luck.

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