- Insider spoke to current and former Mailchimp employees about the recent acquisition of the company by Intuit.
- Employees said they were constantly told that the founders of Mailchimp would never sell.
- Unlike most startups, Mailchimp employees didn’t get any capital. The founders cemented their status as two of the richest people in America.
When employees were recruited to work at Mailchimp, there was a common refrain about hiring managers: no, you won’t get fairness, but you will be part of a rambling company fighting for the little guy. and we will never be acquired or go public.
The founders told anyone who wanted to listen that they would own Mailchimp until they died and bragged about turning down several offers.
“It was part of the tradition of the business that they would never sell,” said a former Mailchimp employee, who, like others interviewed for this story, was granted anonymity because he was not authorized to discuss sensitive internal issues. “The employees have been brainwashed with this story.”
The two founders have sold. Intuit, the financial software giant that makes TurboTax, said Monday it was buying Mailchimp for around $ 12 billion in stock and cash. The co-founders cemented their status as two of America’s richest people.
The employees reacted with shock and anger to the text,
, and Twitter to the case. They described feelings of betrayal and a windfall of money that seemed to benefit only those at the top of the 20-year company.
This account is based on conversations with half a dozen current and former employees; former employees have all left Mailchimp in the past year.
“I was so angry,” said an employee who recently left the company. “I can safely say my texts have exploded, as has the Slack channel of former Mailchimp members. I think for anyone who has been around for a long time and worked hard to make the company what she is today, that was a really hard pill to swallow. “
While there is a wide gap in the paydays with every startup that goes public or is acquired, employees say the chasm at Mailchimp is particularly striking, especially given the egalitarian ethos the founders embraced. strived to project.
“It’s so hypocritical,” said another former employee. “You don’t get a $ 12 billion business without the work of a lot of people, but most of us will never see it.”
Co-founders Ben Chestnut and Dan Kurzius started Mailchimp in 2001 as an offshoot of a web design company primarily aimed at corporate clients. Mailchimp, whose mission is to help small businesses “go beyond” with email marketing, turned out to be much more effective and when it reached 10,000 users in 2007, the founders abandoned the business.
Founded in the wreckage of the dotcom bust, Chestnut and Kurzius prided themselves on being “a Silicon Valley”.
Mailchimp, which has around 1,200 employees, has always been based in Atlanta, where he will still be based as part of Intuit. Far from most tech companies these days that are inundated with venture capital dollars, Mailchimp has focused on profitability over growth and has never taken outside funding.
As a result, the two co-founders own almost all of the business, which means they are expected to earn around $ 5 billion each on the deal.
“Mailchimp has a motto: ’empower the underdog,’” said a former employee. “But it really feels like we are empowering Ben and Dan all the time.”
Some employees said they were particularly furious that financial services giant Intuit was the company that bought Mailchimp; Intuit CEO Susan Goodarzi hosted a
town hall with Chestnut and Kurzius Wednesday afternoon to try to allay the concerns of employees.
“Mailchimp has had a corporate culture for years that has an outsider spirit and now they are bought out by a company that lobbied the US government to make taxes unreportable for free for 20 years,” said a former employee. “But I understand. I guess everyone has their price.”
Some also said they were frustrated with Chestnut’s statements after the sale was announced, which they saw as spurious.
—Ben Chestnut (@benchestnut) September 13, 2021
“It was really deaf,” said a former employee. “It’s a bad look.”
In a statement sent to Insider, the disputed Mailchimp employees were unfairly compensated.
“We have invested millions in the 401 (k) of our employees, contributing up to a maximum of 25% per year in immediate payments over the past 9 years,” a spokesperson said in an email.
The spokesperson also pointed out that Intuit will issue $ 200 million in restricted stock units to Mailchimp employees and that the deal includes around $ 300 million in bonuses, spread over three years.
But the many employees who have left Mailchimp in recent years are excluded, and for current employees, bonuses are only about 2.5% of the total deal value and only amount to $ 83,000 per employee per year.
It’s certainly a significant amount, but a paltry sum compared to the life-changing paydays of the early hires of many venture-funded startups. For example, when Twitter bought ad technology platform MoPub for $ 350 million in 2013, 36 out of 100 employees became millionaires overnight.
Over the years, Mailchimp employees have received other salary benefits. Rather than stock options, employees were entitled to a profit share that included not only the company’s maximum 401 (k) match, but also a cash “pizza bonus” of between 10 and 15% of their base salary when they achieved certain performance targets.
—Derrick has started another project (@dvsch) September 13, 2021
“Having that guaranteed amount of money in my 401k every year was really nice,” said a former employee. “I’ve worked in other startups where equity ends up nil.”
These bonuses were not without criticism. Executives presented employee bonuses as the product of founders’ largesse rather than as a reward for hard work.
“I was amazed at the generosity of the company from day one,” wrote Farrah Kennedy, who was Mailchimp’s COO from 2014 to last year, in a corporate blog post detailing profit sharing in 2015. “Knowing that this is literally our founders (Ben and Dan) co-money, and that they are sharing it so generously, is remarkable.”
The employee who spoke to Insider said he wouldn’t have been at the company that long if he had known it was going to be sold.
“If people had felt they wanted to sell the business, they would have gotten out of there,” said a former employee. “Why would I work without equity if I knew they were going to sell the business for a load of money? “
Fairness for some
Adding to the sense of injustice, many employees feel there was a policy of silence at the top of Mailchimp to offer equity capital to VPs and above, which would include several dozen senior executives.
Whitney Homans, who held senior positions at Mailchimp until she joined Instacart in March, tweeted Monday that some employees had received equity capital.
—Whitney Homans (@whitneyhomans) September 13, 2021
Reached by Insider, Homans declined to comment. A Mailchimp spokesperson said only founders have equity and executives participate in a standard deferred cash compensation plan.
There is also lingering resentment among employees over the “mass exodus” of women and people of color at Mailchimp that Insider reported earlier this year. Since the start of last year, Mailchimp has lost many of its most senior women and people of color: two women in C-level leadership positions, its chief information security officer, a female vice -president and at least eight women or people of color. at the director or senior director level.
“This all follows a cultural crisis six months ago where some of these executives were literally named in articles for their bad behavior,” said a former employee. “There were no consequences.”
Tyler Sonnemaker contributed reporting for this story.