Champagne, tacos and time off: How Dollar Shave Club employees are celebrating $1-billion sale
Alex Janckila, a software engineer at Dollar Shave Club, was sporting something a bit unusual for an employee of a razor company: a five o’clock shadow.
“There was happy hour every hour,” Janckila said with a sheepish grin, one hand clutching a large bottle of electrolyte water. “I was happy for about 24 hours.”
Janckila, who began working at the company 11 months ago, wasn’t the only one smiling Thursday. For employees at Dollar Shave Club, this week is the fulfillment of a dream that many start-ups strive for, but few achieve: a $1-billion payday.
Unilever, the London consumer products giant, said Tuesday that it would acquire the subscription e-commerce site, which mails affordable blades to customers every month.
Although Dollar Shave Club declined to disclose the financials, venture capitalists said there are probably dozens of newly minted millionaires working at the company’s Marina del Rey headquarters.
Many employees said they were still just absorbing the shocking news. Several, tapping quietly away at their laptops, were lounging on the brown leather couches in the open floor plan office — perhaps heeding a pink neon sign hung on the brick wall nearby that says “get back to work.” A few leftovers from earlier celebrations lingered: One table held a huge bottle of whiskey, while unopened bottles of Perrier Jouet Champagne sat next to several computers.
Founder and Chief Executive Michael Dubin will get about $90 million, reports say. Another huge chunk — perhaps 50% to 80% — will go toward venture capital firms that provided about $160 million in backing since the company’s launch in 2011, experts said.
Using that math, executives and other employees would split between $100 million and $400 million. At start-ups, senior management often get a 1% to 3% stake each, with the percentage dropping precipitously after that.
Newer employees and those lower in the organization may get a few thousand dollars either in cash payouts or stock options in the acquiring company. Treatment of unvested stock — shares that can only be sold after a certain number of years — can vary widely depending on the deal hammered out.
Old hands in the start-up world say that many of the 190 employees at Dollar Shave Club will find their lives have changed — some virtually overnight.
You realize you can order surf with your turf for dinner.
— Greg Bettinelli, partner at Upfront Ventures
Greg Bettinelli, a partner at Upfront Ventures, was chief marketing officer at flash sale site Hautelook, based in Los Angeles, when it was acquired by Nordstrom in 2011 for about $270 million in stock.
After the sale was announced, Bettinelli said he was bombarded by calls and emails — some from friends and families offering congratulations, many from wealth managers and investment advisers eager to offer their services.
“It depends on where you are in the organization,” he said. “If you are part of senior management, you are going to start understanding tax rates. People start understanding why people become Republicans.”
Bettinelli said he splurged by golfing at a nice resort in Oregon, something he’d always wanted to do. A few Hautelook workers bought new cars and went on fancy vacations. Unlike Wall Street, those in the tech world tend to shy away from flashy displays of wealth, he said.
It is, after all, an industry of hoodies, not Rolexes.
“You realize you can order surf with your turf for dinner,” Bettinelli said. “You might stay in a nicer hotel and have a little nicer car and you don’t look at prices on the restaurant menu.”
Some at Dollar Shave Club have decidedly more personal ways to celebrate.
Arvind Mishra, a vice president of product, said he planned to treat himself to a Space Warp, a roller coaster construction set he’d had as a child. His parents tossed out his old set, he said, and he’d always wanted to buy another one (a vintage set currently retails for $125 on Amazon).
“Damn it, I’m going to buy it for myself,” Arvind declared, perched on a faux grass-covered step in the office.
Most employees were informed of the sale in team meetings held simultaneously at 10 a.m. Tuesday. There was a party in the afternoon with a taco truck, and nearly everyone headed after work to the Brig, the Venice bar that was the company’s old hangout when it was based a few blocks away.
Janet Song, chief customer officer, said she knew about the deal for several weeks before announcing it to her team. When she did, there was both surprise and anxiety.
“There were some expletives. Some ‘Oh blanks,’” she said. “There was a lot of nervous faces.”
After assuring them their jobs were safe, Song put her team back to work. That didn’t last long.
“I thought, ‘Let’s try to be normal,’ ” she said with a laugh. But “marketing busted out the beer.”
Ken Mirch, director of member services, seized on the good news and asked Song right after the announcement for an extra week off for his honeymoon. Mirch, who started in customer service in 2012, is heading to Hawaii next week.
“As soon as she said ‘yes,’ I made my plans,” he said. “Nothing refundable.”
For some, like Mirch, 27, and Cassie Jasso, 26, Dollar Shave Club was their first real job after college. Jasso, who studied broadcast journalism at USC, started packing orders for Dollar Shave Club in 2012 because she needed cash.
Now an associate manager of public relations, Jasso said it was shocking to find herself at a company that achieved such a success, especially when she never expected to work at a start-up for long.
“I started crying,” she said. “I was so overwhelmed.”
For his part, Dubin said he still hasn’t fully absorbed the news. To celebrate, he hopes to persuade a local television station to let him guest star as a weatherman.
“It’s still surreal,” he said. “It’s a special moment. One milestone on our path.”
Founders who have been through an acquisition said it’s hard to describe the satisfaction after nurturing an idea from conception to success.
Nikao Yang, co-founder of Los Angeles-based AdColony, said there was a great feeling of validation when the video ad platform was acquired in 2014 for $350 million. After all, he said, about nine in 10 start-ups fail, and even fewer make it into the big leagues.
“It’s like childbirth or riding a bike for the first time,” Yang said. “You don’t really know the feeling until it happens.”
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