I worked as a software engineer at a small software company for 18 years. We created a major analytics and data mining product. The founders were professors from the local university. I enjoyed the work even though sometimes the owners didn’t seem to have a vision and changed directions for reasons that are still obscure.
The first few years I worked, the company had no retirement plan. I was young and stupid and didn’t realize how necessary it is to invest early in a retirement plan to be sure that your money has time to amortize. Well, when they finally offered a Simple IRA plan (sort of like a 401k), they matched 3%. It has been my experience that with 401k plans, the matching percentage is usually about 5%. I had an acceptable salary, but knew I could make more money working for Microsoft or a different company. However, the owner of the company after a few years started pushing the idea of an IPO and that “we would all share in the rewards.” I heard that idea pushed for at least 12 years. After the first 5 years (yes, I’m slow), I began to think it was a bunch of BS. However, it didn’t stop the owner from repeating the idea year after year. At some point, the economy tanked in 2008 and nobody was really hiring in my city, and on top of that my tanking marriage finally died. It was difficult to change jobs.
In 2014, the economy started to really improve and the owner sold the company to the software division of a major PC manufacturer. Not quite an IPO, but an IPO is really just a sale of a part of the company. As it turned out, we found out from documents submitted to the SEC that the company was sold for $73 million. How much did the employees “share in the rewards?” Well, zero of course. The owner used the money to gas up his private jet and flew off into the sunset.
When we were taken over by the major PC manufacturer, we did get raises that were long overdue and received annual bonuses. It was an improvement–something that was long overdue. At one point, with the original owners, salaries were frozen for 5 years, but because of the economy and promised IPO, people hung on.
However, big PC manufacturer know how to sell PCs, but they don’t necessarily know a lot about software. After two years, they decided to buy a large cloud provider for something like $50+ BILLION… For the purchase, they needed to liquidate assets and decided to sell off their software division for something around $10 BILLION. We were bought by a Silicon Valley private equity firm after 2.5 years with the big PC manufacturer. The venture capitalists assured us everything would be fine, but soon after they started trimming personnel.
Our little software company/division was just a small part of the $10 billion dollar software company. In reality, they didn’t know what to do with us and our tiny analytics division was the odd man out from the enterprise management software of the rest of the company. Some of us got the feeling they were going to try and sell us since the big brass seemed to lose interest in our product and the direction of our division. We were making business plans very independently of the rest of the company. At some point, they cut some engineers and beefed up the sales department. I got a real bad feeling, did a little research, and then figured that for sure we were on the market.
In early June, it was announced that we were bought by a middleware and analytics company from Silicon Valley which is private and owned by another Silicon Valley venture capital firm. This was the 3rd turnover in about 3 years after 18 years of stability with the original owners.
In July, there was another major bloodletting of personnel. My boss decided to relocate to Dallas and thought it was time to move on. Another engineer took a new position with an oil and gas company. So, one engineer was fired and 3 others were transferred to other positions. If my boss and the other guy hadn’t moved on, then there would have been 3 persons fired. And, we learned today if they hadn’t figured away to transfer 3 engineers into other positions in the new company, then 3 more people would have been fired. That was the development department. But, in the QA department, 4 people were let go.
About 3 years ago were were about 50 people in our office. Now, we are about 30 people–maybe 10 of them software engineers like me. We have millions of lines of code. I don’t know how we will be able to develop new features and maintain the old code.
Well, now… What do I mean about dangling the carrot again and hoping it is not shame on me?
The chief of engineering came and visited us to assure us today that everything was ok. The company is doing great, and he hinted that in a few years we could be ripe for an IPO. Where have I heard that before? Only for a dozen years with the original owner… I can’t help but get excited about counting the money from an IPO, but then I think of what an idiot I was to believe the first owner. Fool me once, shame on you. Fool me twice, shame on me. I hope it’s not shame on me.