
OpenTable Acquires FoodSpotting for $10 Million - jamesjyu
http://allthingsd.com/20130129/opentable-devours-foodspotting-for-10-million-in-cash/?mod=tweet
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hiroprot
Full disclosure: I work for Forkly (<http://forkly.com>), a FoodSpotting
competitor.

I think that it was probably an okay exit for the founders (but definitely no
homerun), and for most of the early angels. As for BlueRun Ventures (who put
in the bulk of the last round), it probably wasn't that good of a return.

Of course, these exits often don't get paid out based on equity, but on some
negotiated deal that will make investors at least somewhat happy. As for the
founders, I'm pretty sure they got signing bonuses, probably tied to staying
at OT for a year or two.

It will be interesting to see what happens to FoodSpotting (apparently it will
stay standalone), and how OpenTable will make use of it.

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dmor
How do you feel this impacts the exit opportunities for Forkly?

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quellhorst
I feel that it puts a fork in it.

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salimmadjd
Big congrats to any team that has an exit. Sure, I think early angels and Dave
McClure probably got better returns on their money than BlueRun ventures(I'm
guessing this). And most employees probably didn't get much. But food being so
saturated with so many different players makes this a respectable exit.
Nothing is worst than spending our valuable time on this planet on something
that goes nowhere, with this exit, Foodspotting is ensured to be around as
long opentable is around. Which is something any founder should be proud of.

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unstoppable
Until opentable can actually get reservations right, it sounds pretty
irrelevant to me. EVERY time I've tried to get reservations on opentable,
they're either not available for 2+ hours, or not available at all. Then when
I call, they invariably have tables for every time slot. Basic functionality
is missing here...

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kareemm
This is by design. Restaurants will sometimes only give OpenTable a few slots
a night as OT often takes a good chunk of margin from the restauranteurs:

'The access fees can be substantial, particularly for restaurants operating on
thin margins. One independent study estimates that OpenTable’s fees (comprised
of startup fees, fixed monthly fees, and per-person reservation fees)
translate to a cost of roughly $10.40 for each “incremental” 4-top booked
through OpenTable.com. To put that in perspective, consider that the average
profit margin, before taxes, for a U.S. restaurant is roughly 5%. This means
that a table of 4 spending $200 on dinner would generate a $10 profit. In this
example, all of that profit would then go to OpenTable fees for having
delivered the reservation, leaving the restaurant with nothing other than the
hope that that customer would come back (and hopefully book by telephone the
next time).'

From [http://insidescoopsf.sfgate.com/blog/2010/10/18/is-
opentable...](http://insidescoopsf.sfgate.com/blog/2010/10/18/is-opentable-
worth-it/)

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brianbreslin
considering they raised $3.5 or so in funding, what do you guys think of $10M
exit. yay or nay? and why?

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kareemm
Off the top of my head, let's do some math (keeping it simple, I have no idea
of actual #s):

Before fundraising: 84%: 3 Co-founders @ 28% each 16%: option pool

1st round - $750k @ $3.75M post. No liquidation prefs or ratcheting. Now the
cap table looks like this:

67.2%: 3 Co-founders @ 22.4% each 12.8%: option pool 20%: Angels

2nd round - $3M @ 10M post. 1x straight preferred liquidation pref (not
participating), no ratcheting.

Cap table:

47.04%: 3 co-founders @ 15.68% each 8.96%: option pool 14%: Angels 30%: Blue
Run

A $10M exit looks like this: $3M: Blue Run $4.70M: 3 co-founders @ $1.568M
each $896k: option pool payout $1.4M: Angels

Not bad, not great, but that assumes no participating preferred preference,
which would have everybody but Blue Run doing a heck of a lot worse.

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guynamedloren
Interesting perspective from the comments here.

$1.5M per cofounder over 3 years puts them at $500k/year. Pays more than most
jobs I can think of. And you can certainly do a lot with $1.5M in the bank (no
mega mansion in SV, but endless traveling, comfort, etc). All relative, I
guess. Us Hacker News folk have a skewed vision on the world :)

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rorrr
You can't compare a rare successful startup exit to a regular salary. You
could, but you need to multiply both by the risk factor.

$1.5M is quite low, in my opinion. Not even close enough to retire in the US.

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guynamedloren
Who said anything about retiring? These people are 30 years old. I don't think
the avg 30 year old has $1.5M cash in the bank (and a comfy position at a tech
company). All I'm saying is that it's very respectable.

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rorrr
It's slightly more respectable than someone winning a lottery. For every
success story like that there are hundreds of developers who didn't take
regular jobs and ended up in debt and bankruptcy.

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masiello
All this food services bubble is making me itchy. Allergy?

