
Google paid $380M to buy Bebop, Diane Greene donating her $148M share - chermanowicz
http://venturebeat.com/2016/01/04/google-paid-380m-to-buy-bebop-executive-diane-greene-donating-her-148m-share/
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samstave
What exactly is/did Bebop make/do?

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throwaway090999
I'm posting from a throwaway because I have fairly intimate knowledge of
Bebop.

The reality is that they built and rebuilt several "enterprise" applications
and pieces of technology. At one point it was a API based database, and then
an application, and the latest iteration was an ATS built on top of their
proprietary database. No one at their company could tell me what they actually
did because there wasn't an aligned vision from their management. Alas, they
had senior people formerly from VMWare and Diane Green at the helm. The
company existed for roughly 2 years and wasn't able to actually produce
customer working software from what I could tell. The acquisition was a
straight up acquihire to get senior enterprise software folks on board to help
build Google's presence there.

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tyingq
What is "an ATS"? Applicant tracking system? Above top secret?

Can you share roughly how many employees would have come in the aquihire?
$380M is a big number.

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samstave
Interesting that Diane is donating her $148MM - why pay that much to acquire
her if it's going to be just donated?

Not that there is anything wrong with that, it's just curious.

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spacecowboy_lon
Or if she really wanted to be charitable distribute her shares to the rank and
file employees before the sale via an EBT (assuming the USA has such a thing)

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samstave
That would have been epic PR - but considering they may all land jobs at
Google - I doubt these guys are suffering financially themselves

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spacecowboy_lon
The USA is not like the EU where TUPE applies and every one moves over to the
acquiring company.

And should not all the employees share in the windfall equally (sorry if thats
a bit socialist for HN)

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SeoxyS
Is the "donor-advised fund" mentioned here similar to a "charitable remainder
trust?" If so, this may just be a very astute tax planning strategy.

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rhc2104
Not really, because you get none of the money back.

However, you can take the charitable tax deduction this year, instead of
future years when you plan on giving money to charity. Also, the capital
gains/dividends/interest that the DAF earns isn't taxed, so if you plan on
giving to charities in the future, this is one way of increasing that amount.

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bankim
From what I've known, top engineers from VMware had moved to Bebop and
recruiting was purely based on their previous performance and contacts with
founding team at VMware.

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intopieces
Much of this discussion revolves around the perfectly legal tax avoidance
mechanism utilized by Greene. Missing, though, is what exactly that revelation
means. Are we advocating the removal of such mechanisms? Calling for an
addition tax? Is there a bill I can advocate my senator to vote for? I do find
such schemes interesting in their own right, but I can't quite shake the tone
of indignation present in the discussion -- indignation that seems to lead
nowhere.

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humanrebar
I mostly agree, but there is a justice issue when the tax code has loopholes
that are only accessible to people with clever tax attorneys.

To contrast, if I got an extra $5K in my bonus, I couldn't give it to my
friend to help pay for the adoption expenses she has be racking up. If it were
a donation of $50 million, I could form a targeted charity and write the whole
thing off on my taxes.

What to do about it? Probably simplify the tax code. Complicated laws,
especially tax laws, are just not fair.

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nodesocket
(downvoted to -1 points yet again, even though it had 4 points)

46 days ago, on the original thread[1] announcing the acquisition, I wrote the
following comment, which proceeded to get downvoted to the bottom.

"Did Diane's bebop even launch? I can't find their website. It is kind of
frustrating that everybody involved (employees, investors) in bebop are
getting a payday, without really putting in much work, or verifying their
ideas. Just leaves a sour taste in my mouth (old boys network) as a two-time
failed entrepreneur."

1\.
[https://news.ycombinator.com/item?id=10597896](https://news.ycombinator.com/item?id=10597896)

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thrownaway2424
Is it just me, or is this deal somewhat shady? It just seems like acquiring
the startup of one of your board members is one of those things you shouldn't
do, for the sake of appearances if nothing else.

When Ralph Yarro was using pumped-up SCOX shares to acquire his side
businesses, people were rightly suspicious, and lawsuits followed. Of course
SCOX != GOOG in any way, but the activity seems analogous.

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ape4
Except for the charity donation

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kareemm
Two things wrt the donation.

First, she gets a massive tax receipt to use against other income. I don't
know how it works in the US, but in Canada you can use charitable tax receipts
to lower taxable income in future years if you don't want to use the whole
thing in the year in which you made the donation.

Second, she donated to a donor advised fund, or DAF. A DAF is a charitable
entity that is sort of like a bank account: you put your money in, get the tax
receipt, your money manager invests the capital, and you can allocate some
portion of the money (the amount depends on the financial institution's
policies) to actual 501c3's (I.e charities doing charitable work).

DAFs are just another instrument offered by the Fildelities of the world to
increase assets under management.

The most common reason people give to DAFs is so they can get a tax receipt
for the current year and defer the decision about which charities to support
until later.

Plus giving stock to charity is the most tax-efficient way to give. She gets
the tax receipt for $148m regardless if the stock goes down after the
donation. And if it goes up, she has more to give to charities.

I've Had a long term contract to build an online donor advised fund, so my
head has been in this space for 8y or so.

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jahnu
> I don't know how it works in the US, but in Canada you can use charitable
> tax receipts to lower taxable income in future years if you don't want to
> use the whole thing in the year in which you made the donation.

I don't know how this can be a tax-dodge of any significance. Surely you can
only offset your tax by the amount you donated anyway so it makes no
difference to you in the end.

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twistedpair
You donate your $100M of highly over inflated stock. You know that by the time
you could really sell the stock (i.e. various restrictions in the grant
terms), you'd get nothing close to $100M. Let's say you expect it to drop to
$20M in 24mo.

You just locked in the 'donation' tax write off amount at the peak value of
the stock ($100M), but it can sit in your DAF for 2 years until you finally
sell it for $20M (an give it to an actual charity). Going forward, you've got
$100M your can deduct from your future taxes/income, that was only really
worth $20M. You have effectively captured the value of the over inflated stock
in the form of not paying any more taxes for a long time going forward.

This is how the rich get out of paying taxes. ;)

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Cyph0n
Excellent explanation. What a smart technique.

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bkeroack
The really smart thing would be to donate[1] it to a "charity" you create and
fully control (that your kids will inherit, etc) so it's effectively a tax-
free bank account.

1\. [http://www.nytimes.com/2015/12/02/technology/mark-
zuckerberg...](http://www.nytimes.com/2015/12/02/technology/mark-zuckerberg-
facebook-charity.html)

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s73v3r
And what did the people who've actually done the work get?

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kzhahou
Only founders get rich, don't you know?

