9 ms·

Loopt acquired by payment card provider for $43.3m in cash

200 points by speedracr 15y ago

javery 15y ago
I am very curious how YC makes out in a deal like this - when there is 17M of capital invested after them in A and B rounds if there was any sort of liquidity preference you can pretty much guarantee YC didn't see a dime. (especially since 9M of this was retention for employees which makes me think that the employees weren't going to make anything from their equity/shares)
- shingen 15y ago
  Assume they got 5% of the company for $20k. It's very plausible they walked with between $500k and $1m. That's an awesome return on $20k.
  - nikcub 15y ago
    Not how it works since with later rounds you have both dilution and probably a liquidity preference The figures here work out almost exactly to Sequoia and NEA getting their 2x (they invested a combined $17M) and plus the employee pool (2 x $17M = $34M + $9.8M = $43.8 - the announced sale price was $43.4M) That is just me speculating, but I would be surprised if it isn't far off.
    - shingen 15y ago
      YC doesn't have any anti-dilution clauses in their terms? Surprising given their small stakes. All I've seen are the surface features of the YC deals, so I'm not up to speed on the specific terms they get.
      - jgrahamc 15y ago
        The YC AA documents have a 1x preference (i.e. they can take their money out before distribution) and they have a right to reinvest pro-rata. http://ycombinator.com/seriesaa.html http://ycombinator.com/seriesaa.html
        pg 15y ago
        Those aren't the terms we use. Those docs are something we and WSGR created for the startups we fund to use to when raising money later. We don't get any liquidation preference or pro-rata rights.
      - pbreit 15y ago
        Apparently not. But even if, they'd still have to buck up big time to maintain share.
- sawyer 15y ago
  I would imagine there's a lot of long term value created by folding sama and team into the YC ecosystem. I'd be willing to bet that Loopt isn't the last venture Sam's going to be involved in, and when the time comes to start something new YC will likely be part of the conversation. This is why pg talks about looking at founders before their ideas.
  - dwynings 15y ago
    Or sama becomes a full-time YC partner. Either way, it's a win for YC.
OoTheNigerian 15y ago
I think Loopt made an error in partnering exclusively with carriers. I remember when I was in the UK and heard of loopt the first tifme. I visited the site and was told to put in a US number. It was there they lost it. I am really looking forward to what Sam has up his sleeves now that he is free.
- sspencer 15y ago
  I had a very similar experience. I heard about Loopt on here when they first launched. It seemed really interesting and I wanted to sign up but it was only for Boost Mobile at the time, which neither I nor any of my friends used. I just shrugged and closed the tab.
- jeremymims 15y ago
  In 2005, there was no other choice but to work directly with the carriers if you wanted your software widely distributed on mobile phones. At the time, Sam was acknowledged for having the chutzpa to go negotiate directly with the carriers and succeed.
- Iroiso 15y ago
  You are right, Lately I've thinking of loopt as holding down sam, let's see whats under his sleeve now.
- saddino 15y ago
  If a significant portion of his return is tied up in the retention, he's going nowhere soon.
- kogir 15y ago
  You're essentially saying that trying to do Loopt at all was a mistake and we just should have done something else. Everyone seems to forget that before iPhone, and later Android, you had no choice but to partner with carriers - there was no other way to distribute your application. Even in Europe, where the phone ecosystem is different, access to location required carrier support, and nearly no handsets had the ability to locate themselves without network assistance. Loopt made mistakes, many of which were mine, but that wasn't one of them.
alapshah 15y ago
In case anyone is missing what has happened here, this is why people hate on private equity/VC. As far as I can tell, Loopt wasn't doing very well. http://www.google.com/insights/search/#q=loopt.com&cmpt=q http://www.google.com/insights/search/#q=loopt.com&cmpt=... They had an attempt to revive the company to compete with Groupon last year that many here thought was stupid and died an early death (http://news.ycombinator.com/item?id=2696412 http://news.ycombinator.com/item?id=2696412) Michael Moritz (Sequoia partner) is still on the board of Green Dot, now a publicly traded company worth north of a billion dollars. Almost the entire board (http://ir.greendot.com/phoenix.zhtml?c=235286&p=irol-govBoard http://ir.greendot.com/phoenix.zhtml?c=235286&p=irol-gov... ) is Private Equity/VC guys, they do this kind of inside baseball all the time, it's no sweat off their back to do Moritz a favor. He convinces Green Dot to acquire Loopt for a huge amount of cash (Green Dot was sitting on $225 million in cash). Sequoia makes a cool $15 million. Related: the always-informative Planet Money did a special on Private Equity and you can see how Bain Capital got its money back on a company that went bankrupt: http://www.npr.org/blogs/money/2012/02/23/147257517/how-mitt-romneys-firm-tried-and-failed-to-build-a-paper-empire http://www.npr.org/blogs/money/2012/02/23/147257517/how-mitt... TL;DR the company they bought acquired another company and raised significant debt- they used that debt to pay back Bain Capital.
- shareme 15y ago
  some backstory..beware personal opinion I had the opportunity to interview with Loopt sometime ago, right when they in fact did the name change to Loopt. My read than was that they in long term terms were going to fail as certain constraints to do things were not in their best interests...at that time it was Mobile Operator limits..tie-=ups Its a sad thing as current deal looks to be only based on patents values..not what Sam's team put into it..
- nikcub 15y ago
  raising debt to pay a dividend back to investors is more common than not amongst the LBO funds. it makes sense if you have a steady and decent income stream, it is a bit like drawing down on equity in your house in order to take a holiday, except the rates are much better (when people complain about this, I am not really sure what they want to be done about it) the VCs of silicon valley are very far away from the Wall St type of private equity (although they are becoming closer with the secondary markets now opened up - it used to be that your vc investors were in all the way until the exit) as for Sequoia, it is pretty well known that the top tier VCs look after their own. Look through the Sequoia history and you won't find very many outright failures, it is a reason why entrepreneurs choose to work with them. I very much doubt Moritz can 'make' Green Dot do the deal, but I am pretty sure he put it all together - it is more a testament to his/their dealmaking abilities than any leverage he would have as a minority shareholder and director in a public company.
dmix 15y ago
"It also helps that Sequoia is an investor in both Loopt and Green Dot, of course." That makes more sense now. I was wondering how the talks got started.
sama 15y ago
Happy to answer any questions I'm able to. Looking forward to the great stuff we're going to do at Green Dot!
- rokhayakebe 15y ago
  1 - Would you say you guys were too early to market? 2 - Was your monthly active user base above 2M? 3 - What contributed to Loopt loosing its appeal over the past 12/18 months?
  - sama 15y ago
    1. yes, although that gave us some advantages as well. 2. not for our core loopt app. 3. i think in general location services have lost some luster over the last 12/18 months, but i also think a lot of the things that we've been doing--real-time deals, loyalty offers, etc are generating a lot of interest among users and we'll hopefully be able to take that to the next level at green dot.
  - codinghorror 15y ago
    Per http://venturebeat.com/2012/03/09/loopt-dau/ http://venturebeat.com/2012/03/09/loopt-dau/ daily active users were below 500 prior to the sale.
- deleted 15y ago
  [deleted]
- razin 15y ago
  Why did you sell?
  - sama 15y ago
    We realized that to be really successful, we needed to be about finance and payments as well as location--I think the most interesting things will happen when those two come together. We talked to a number of companies and were most excited about the team and vision at Green Dot.
rokhayakebe 15y ago
The lesson here is social applications go in and out of style and entrepreneurs must really entertain early acquisition offers when they are hot.
- kenrikm 15y ago
  That's not always an option. Check out this Article (also on the HN front page) http://www.danshapiro.com/blog/2010/08/vc-insanity-economics/ http://www.danshapiro.com/blog/2010/08/vc-insanity-economics...
wilschroter 15y ago
I get so annoyed when I see people pick apart an acquisition. I saw this same behavior for Gowalla, and then Mint before it. "They didn't make any money. They sold too early." They remind me of people that would be sitting at the finish line of a marathon telling the last people to cross "Boy, your time really sucked." If you are one of the few entrepreneurs that has come far along enough to get to a sale - for any amount - I just flat out applaud you.
- sama 15y ago
  Thank you. It's a bummer to be so excited for something I've worked hard for and then read haters hating all over the internet. This brightened up my day; hope we meet in person some day so I can properly say thanks.
  - deleted 15y ago
    [deleted]
  - comatose_kid 15y ago
    Congrats Sam, it sounds like a good outcome, and I've always been impressed that you had the boldness to pursue a vision that involved working with carriers. Ignore that haters - unfortunately Hacker News comments seem to have reverted to the mean (pun intended) as the site has grown.
  - aswanson 15y ago
    Hey man, haters gonna hate. You compressed more success in 7 years than 99.9 % of programmers will in 4+ decades in a cubicle. Kudos.
  - unohoo 15y ago
    Let the haters hate. Just like you might have shrugged off other, bigger downs during the 7 years of running Loopt, just shrug off the haters and savor the success, no matter how small or big it is. Very few people can lay claim to running a company for 7 years and coming out successful on the other end. Congrats and good luck for whats next.
  - 15y ago
whyleyc 15y ago
Sam - Did Loopt ever make any profit, if so what area of the business turned out to be most profitable for you guys ? (This is meant as a genuine question, not a snarky comment)
Harj 15y ago
I've been incredibly impressed by Sam since he started as a part time partner at YC, as have all of the founders. Greendot are lucky to have him and his team.
- justin 15y ago
  Likewise. Sam is extremely effective, works super hard for YC companies, and knows something about seemingly everything. Even as a talent acquisition alone this would make sense.
- pc 15y ago
  Agreed. I wrote a bit more here: http://news.ycombinator.com/item?id=3560102 http://news.ycombinator.com/item?id=3560102
- earbitscom 15y ago
  Seriously...been getting a lot of help from Sam lately and it's unbelievable how insightful the guy is. If I had a billion dollars, I'd pay $43M to have Sam in my corner. ;)
2pasc 15y ago
The sad truth about startup life and Silicon Valley is that many people become wealthy not because they created something meaningful with lots of customers or users or revenues, but because they get acquired and let die. This would be all fine if founders did not equate net worth with success and smarts. I admire Companies that get acquired and where the product continue to live on beyond the acquisition like PayPal, Siri, Youtube, Admob etc... That's the proof you created something really meaningful!
- kenrikm 15y ago
  I think you're missing the point, If you're in this just to get wealthy there are many other professions that offer a much safer route to get there (Lawyer, Doctor) I don't think you just fall into being an entrepreneur for the money, otherwise you would give up when you're eating ramen noodles pulling 18 hour shifts for months on end without a return. Nope, I think to build a company you need something else driving you rather than the dream of wealth alone. From what I have seen it's clear that SamA has that drive or the company would not have made it as far as it did.
  - 2pasc 15y ago
    I don't know SamA, and so I am not saying this against him at all. Nor am I saying that people become entrepreneur for the money. As you mention, there are safer routes to get money. I am describing something I have observed in Silicon Valley, especially in the last few years. You have the lucky folks who flipped their Company fast, and sometimes see themselves as the master of the universe. You also have the dedicated ones - and Dennis Crowley from Dodgeball and Foursquare is definitely in this category. I think it is sad, especially because of all the efforts that we as entrepreneurs put into these Companies. Most of all, I criticize this general sentiment in SV right now, that success=money through acquisition/IPO. If SamA gets his vision realized through Green Dot - all the better for him and for the Loopt team! (and us as users!)
randome3889 15y ago
How much money did the founders make off of this?
rdl 15y ago
This is the second biggest announced and second to fifth unannounced amount YC sale to date, right?
kenrikm 15y ago
I don't think that the team at Loopt deserves anything less than a huge amount of respect. They built something big and it did not work out, it happens. It's easy to sit and play armchair quarterback but I doubt anyone who has ever tried to make something big would chalk this up as a failure. No one one learns how do ride a bike without a few scrapes but eventually you do learn. I'm certain Sam and the team will know nothing but success if not in this venture than the next. Good luck guys!
staunch 15y ago
Congrats sama. Looking forward to your next one.
ajju 15y ago
The world of payments has already changed dramatically with technology companies from Square to even Groupon essentially building a way to "pay with your phone". To continue succeeding, currently successful but "old world" payment companies like Green Dot need to become technology companies. Given Loopt's stellar team, Green Dot couldn't have chosen a better company to acquire. I have been fortunate to receive advice/help from both Sam and Nick, but read "Shit Sam Altman says" and you'll know how smart these guys are. http://anandkulkarni.posterous.com/-sam-altman-says http://anandkulkarni.posterous.com/-sam-altman-says It also seems to me that the demographics of Loopt users overlap nicely with the demographics Green Dot wants to target. A head start of 1M+ users in the demographic you are targeting is very valuable. Congrats Loopt!
lyime 15y ago
Congrats to Sam and the team. Green Dot is lucky to have him. During last summer at YC Sam helped us quite a bit on different fronts. He has this amazing clarity in his thought process and is generally a really helpful guy.
pg 15y ago
Congratulations, Sam! Though Sam himself may not realize it, he has had a big effect on Y Combinator. One of the most important components of YC is the alumni network. It's now quite large (over 800 people) and the founders help one another a lot. We can affect the size of the alumni network very directly, but we have less control over how much they help one another-- without which of course the size doesn't matter. Sam is, more than any other single person, the one who set the standard for how much the alumni help one another. He set it by example. After each new batch of founders got lots of help from Sam, it seemed natural to them when they in turn became alumni to help new founders that much. We encourage the founders to help one another of course, but Sam's example had more effect than our exhortations. And we lucked out in that respect because Sam is remarkably generous with his time. He's a sort of natural teacher. He also knows everyone. He has not only done countless introductions for alumni, but did most of the initial intros in Silicon Valley for YC itself. He introduced us to our lawyer, Wilson Sonsini, and he was even the one who introduced us to Sequoia. YC now does many intros per day, but if you follow the tree back to the beginning, Sam was the root node.
davidwhodge 15y ago
Congratulations to Sam & team. A brief conversation with Sam was what convinced me to apply to YC in the first place, and I'm very glad I did. Sam has shown himself to be an expert, a smooth operator, and an excellent teacher. Green Dot is very lucky to have Sam & co joining them.
sunmoon 15y ago
what a shame if anyone can walk out this failure with the illusion of success. The funny part is there is no failed founder, only successful or very successful founders, it also tells us how risky to join startup not as a founder...

200 points by speedracr 15y ago

I am very curious how YC makes out in a deal like this - when there is 17M of capital invested after them in A and B rounds if there was any sort of liquidity preference you can pretty much guarantee YC didn't see a dime. (especially since 9M of this was retention for employees which makes me think that the employees weren't going to make anything from their equity/shares)

shingen 15y ago
Assume they got 5% of the company for $20k. It's very plausible they walked with between $500k and $1m. That's an awesome return on $20k.
- nikcub 15y ago
  Not how it works since with later rounds you have both dilution and probably a liquidity preference The figures here work out almost exactly to Sequoia and NEA getting their 2x (they invested a combined $17M) and plus the employee pool (2 x $17M = $34M + $9.8M = $43.8 - the announced sale price was $43.4M) That is just me speculating, but I would be surprised if it isn't far off.
  - shingen 15y ago
    YC doesn't have any anti-dilution clauses in their terms? Surprising given their small stakes. All I've seen are the surface features of the YC deals, so I'm not up to speed on the specific terms they get.
    - jgrahamc 15y ago
      The YC AA documents have a 1x preference (i.e. they can take their money out before distribution) and they have a right to reinvest pro-rata. http://ycombinator.com/seriesaa.html http://ycombinator.com/seriesaa.html
      - pg 15y ago
        Those aren't the terms we use. Those docs are something we and WSGR created for the startups we fund to use to when raising money later. We don't get any liquidation preference or pro-rata rights.
    - pbreit 15y ago
      Apparently not. But even if, they'd still have to buck up big time to maintain share.
sawyer 15y ago
I would imagine there's a lot of long term value created by folding sama and team into the YC ecosystem. I'd be willing to bet that Loopt isn't the last venture Sam's going to be involved in, and when the time comes to start something new YC will likely be part of the conversation. This is why pg talks about looking at founders before their ideas.
- dwynings 15y ago
  Or sama becomes a full-time YC partner. Either way, it's a win for YC.

OoTheNigerian 15y ago

I think Loopt made an error in partnering exclusively with carriers. I remember when I was in the UK and heard of loopt the first tifme. I visited the site and was told to put in a US number. It was there they lost it. I am really looking forward to what Sam has up his sleeves now that he is free.

sspencer 15y ago
I had a very similar experience. I heard about Loopt on here when they first launched. It seemed really interesting and I wanted to sign up but it was only for Boost Mobile at the time, which neither I nor any of my friends used. I just shrugged and closed the tab.
jeremymims 15y ago
In 2005, there was no other choice but to work directly with the carriers if you wanted your software widely distributed on mobile phones. At the time, Sam was acknowledged for having the chutzpa to go negotiate directly with the carriers and succeed.
Iroiso 15y ago
You are right, Lately I've thinking of loopt as holding down sam, let's see whats under his sleeve now.
saddino 15y ago
If a significant portion of his return is tied up in the retention, he's going nowhere soon.
kogir 15y ago
You're essentially saying that trying to do Loopt at all was a mistake and we just should have done something else. Everyone seems to forget that before iPhone, and later Android, you had no choice but to partner with carriers - there was no other way to distribute your application. Even in Europe, where the phone ecosystem is different, access to location required carrier support, and nearly no handsets had the ability to locate themselves without network assistance. Loopt made mistakes, many of which were mine, but that wasn't one of them.

alapshah 15y ago

In case anyone is missing what has happened here, this is why people hate on private equity/VC. As far as I can tell, Loopt wasn't doing very well. http://www.google.com/insights/search/#q=loopt.com&cmpt=q http://www.google.com/insights/search/#q=loopt.com&cmpt=... They had an attempt to revive the company to compete with Groupon last year that many here thought was stupid and died an early death (http://news.ycombinator.com/item?id=2696412 http://news.ycombinator.com/item?id=2696412) Michael Moritz (Sequoia partner) is still on the board of Green Dot, now a publicly traded company worth north of a billion dollars. Almost the entire board (http://ir.greendot.com/phoenix.zhtml?c=235286&p=irol-govBoard http://ir.greendot.com/phoenix.zhtml?c=235286&p=irol-gov... ) is Private Equity/VC guys, they do this kind of inside baseball all the time, it's no sweat off their back to do Moritz a favor. He convinces Green Dot to acquire Loopt for a huge amount of cash (Green Dot was sitting on $225 million in cash). Sequoia makes a cool $15 million. Related: the always-informative Planet Money did a special on Private Equity and you can see how Bain Capital got its money back on a company that went bankrupt: http://www.npr.org/blogs/money/2012/02/23/147257517/how-mitt-romneys-firm-tried-and-failed-to-build-a-paper-empire http://www.npr.org/blogs/money/2012/02/23/147257517/how-mitt... TL;DR the company they bought acquired another company and raised significant debt- they used that debt to pay back Bain Capital.

shareme 15y ago
some backstory..beware personal opinion I had the opportunity to interview with Loopt sometime ago, right when they in fact did the name change to Loopt. My read than was that they in long term terms were going to fail as certain constraints to do things were not in their best interests...at that time it was Mobile Operator limits..tie-=ups Its a sad thing as current deal looks to be only based on patents values..not what Sam's team put into it..
nikcub 15y ago
raising debt to pay a dividend back to investors is more common than not amongst the LBO funds. it makes sense if you have a steady and decent income stream, it is a bit like drawing down on equity in your house in order to take a holiday, except the rates are much better (when people complain about this, I am not really sure what they want to be done about it) the VCs of silicon valley are very far away from the Wall St type of private equity (although they are becoming closer with the secondary markets now opened up - it used to be that your vc investors were in all the way until the exit) as for Sequoia, it is pretty well known that the top tier VCs look after their own. Look through the Sequoia history and you won't find very many outright failures, it is a reason why entrepreneurs choose to work with them. I very much doubt Moritz can 'make' Green Dot do the deal, but I am pretty sure he put it all together - it is more a testament to his/their dealmaking abilities than any leverage he would have as a minority shareholder and director in a public company.

dmix 15y ago

"It also helps that Sequoia is an investor in both Loopt and Green Dot, of course." That makes more sense now. I was wondering how the talks got started.

sama 15y ago

Happy to answer any questions I'm able to. Looking forward to the great stuff we're going to do at Green Dot!

rokhayakebe 15y ago
1 - Would you say you guys were too early to market? 2 - Was your monthly active user base above 2M? 3 - What contributed to Loopt loosing its appeal over the past 12/18 months?
- sama 15y ago
  1. yes, although that gave us some advantages as well. 2. not for our core loopt app. 3. i think in general location services have lost some luster over the last 12/18 months, but i also think a lot of the things that we've been doing--real-time deals, loyalty offers, etc are generating a lot of interest among users and we'll hopefully be able to take that to the next level at green dot.
- codinghorror 15y ago
  Per http://venturebeat.com/2012/03/09/loopt-dau/ http://venturebeat.com/2012/03/09/loopt-dau/ daily active users were below 500 prior to the sale.
deleted 15y ago
[deleted]
razin 15y ago
Why did you sell?
- sama 15y ago
  We realized that to be really successful, we needed to be about finance and payments as well as location--I think the most interesting things will happen when those two come together. We talked to a number of companies and were most excited about the team and vision at Green Dot.

rokhayakebe 15y ago

The lesson here is social applications go in and out of style and entrepreneurs must really entertain early acquisition offers when they are hot.

kenrikm 15y ago
That's not always an option. Check out this Article (also on the HN front page) http://www.danshapiro.com/blog/2010/08/vc-insanity-economics/ http://www.danshapiro.com/blog/2010/08/vc-insanity-economics...

wilschroter 15y ago

I get so annoyed when I see people pick apart an acquisition. I saw this same behavior for Gowalla, and then Mint before it. "They didn't make any money. They sold too early." They remind me of people that would be sitting at the finish line of a marathon telling the last people to cross "Boy, your time really sucked." If you are one of the few entrepreneurs that has come far along enough to get to a sale - for any amount - I just flat out applaud you.

sama 15y ago
Thank you. It's a bummer to be so excited for something I've worked hard for and then read haters hating all over the internet. This brightened up my day; hope we meet in person some day so I can properly say thanks.
- deleted 15y ago
  [deleted]
- comatose_kid 15y ago
  Congrats Sam, it sounds like a good outcome, and I've always been impressed that you had the boldness to pursue a vision that involved working with carriers. Ignore that haters - unfortunately Hacker News comments seem to have reverted to the mean (pun intended) as the site has grown.
- aswanson 15y ago
  Hey man, haters gonna hate. You compressed more success in 7 years than 99.9 % of programmers will in 4+ decades in a cubicle. Kudos.
- unohoo 15y ago
  Let the haters hate. Just like you might have shrugged off other, bigger downs during the 7 years of running Loopt, just shrug off the haters and savor the success, no matter how small or big it is. Very few people can lay claim to running a company for 7 years and coming out successful on the other end. Congrats and good luck for whats next.
- 15y ago

whyleyc 15y ago

Sam - Did Loopt ever make any profit, if so what area of the business turned out to be most profitable for you guys ? (This is meant as a genuine question, not a snarky comment)

Harj 15y ago

I've been incredibly impressed by Sam since he started as a part time partner at YC, as have all of the founders. Greendot are lucky to have him and his team.

justin 15y ago
Likewise. Sam is extremely effective, works super hard for YC companies, and knows something about seemingly everything. Even as a talent acquisition alone this would make sense.
pc 15y ago
Agreed. I wrote a bit more here: http://news.ycombinator.com/item?id=3560102 http://news.ycombinator.com/item?id=3560102
earbitscom 15y ago
Seriously...been getting a lot of help from Sam lately and it's unbelievable how insightful the guy is. If I had a billion dollars, I'd pay $43M to have Sam in my corner. ;)

2pasc 15y ago

The sad truth about startup life and Silicon Valley is that many people become wealthy not because they created something meaningful with lots of customers or users or revenues, but because they get acquired and let die. This would be all fine if founders did not equate net worth with success and smarts. I admire Companies that get acquired and where the product continue to live on beyond the acquisition like PayPal, Siri, Youtube, Admob etc... That's the proof you created something really meaningful!

kenrikm 15y ago
I think you're missing the point, If you're in this just to get wealthy there are many other professions that offer a much safer route to get there (Lawyer, Doctor) I don't think you just fall into being an entrepreneur for the money, otherwise you would give up when you're eating ramen noodles pulling 18 hour shifts for months on end without a return. Nope, I think to build a company you need something else driving you rather than the dream of wealth alone. From what I have seen it's clear that SamA has that drive or the company would not have made it as far as it did.
- 2pasc 15y ago
  I don't know SamA, and so I am not saying this against him at all. Nor am I saying that people become entrepreneur for the money. As you mention, there are safer routes to get money. I am describing something I have observed in Silicon Valley, especially in the last few years. You have the lucky folks who flipped their Company fast, and sometimes see themselves as the master of the universe. You also have the dedicated ones - and Dennis Crowley from Dodgeball and Foursquare is definitely in this category. I think it is sad, especially because of all the efforts that we as entrepreneurs put into these Companies. Most of all, I criticize this general sentiment in SV right now, that success=money through acquisition/IPO. If SamA gets his vision realized through Green Dot - all the better for him and for the Loopt team! (and us as users!)

randome3889 15y ago

How much money did the founders make off of this?

rdl 15y ago

This is the second biggest announced and second to fifth unannounced amount YC sale to date, right?

kenrikm 15y ago

I don't think that the team at Loopt deserves anything less than a huge amount of respect. They built something big and it did not work out, it happens. It's easy to sit and play armchair quarterback but I doubt anyone who has ever tried to make something big would chalk this up as a failure. No one one learns how do ride a bike without a few scrapes but eventually you do learn. I'm certain Sam and the team will know nothing but success if not in this venture than the next. Good luck guys!

staunch 15y ago

Congrats sama. Looking forward to your next one.

ajju 15y ago

The world of payments has already changed dramatically with technology companies from Square to even Groupon essentially building a way to "pay with your phone". To continue succeeding, currently successful but "old world" payment companies like Green Dot need to become technology companies. Given Loopt's stellar team, Green Dot couldn't have chosen a better company to acquire. I have been fortunate to receive advice/help from both Sam and Nick, but read "Shit Sam Altman says" and you'll know how smart these guys are. http://anandkulkarni.posterous.com/-sam-altman-says http://anandkulkarni.posterous.com/-sam-altman-says It also seems to me that the demographics of Loopt users overlap nicely with the demographics Green Dot wants to target. A head start of 1M+ users in the demographic you are targeting is very valuable. Congrats Loopt!

lyime 15y ago

Congrats to Sam and the team. Green Dot is lucky to have him. During last summer at YC Sam helped us quite a bit on different fronts. He has this amazing clarity in his thought process and is generally a really helpful guy.

pg 15y ago

Congratulations, Sam! Though Sam himself may not realize it, he has had a big effect on Y Combinator. One of the most important components of YC is the alumni network. It's now quite large (over 800 people) and the founders help one another a lot. We can affect the size of the alumni network very directly, but we have less control over how much they help one another-- without which of course the size doesn't matter. Sam is, more than any other single person, the one who set the standard for how much the alumni help one another. He set it by example. After each new batch of founders got lots of help from Sam, it seemed natural to them when they in turn became alumni to help new founders that much. We encourage the founders to help one another of course, but Sam's example had more effect than our exhortations. And we lucked out in that respect because Sam is remarkably generous with his time. He's a sort of natural teacher. He also knows everyone. He has not only done countless introductions for alumni, but did most of the initial intros in Silicon Valley for YC itself. He introduced us to our lawyer, Wilson Sonsini, and he was even the one who introduced us to Sequoia. YC now does many intros per day, but if you follow the tree back to the beginning, Sam was the root node.

davidwhodge 15y ago

Congratulations to Sam & team. A brief conversation with Sam was what convinced me to apply to YC in the first place, and I'm very glad I did. Sam has shown himself to be an expert, a smooth operator, and an excellent teacher. Green Dot is very lucky to have Sam & co joining them.

sunmoon 15y ago

what a shame if anyone can walk out this failure with the illusion of success. The funny part is there is no failed founder, only successful or very successful founders, it also tells us how risky to join startup not as a founder...