1) He did not own 100% of that company. 2) There were 4 cofounders and 90 employees. 3) He got paid mostly in Uber shares that vested over time and he left before they vested.

https://www.cnbc.com/2017/12/14/ieee-analysis-shows-uber-pai...

Good link. It looks like half of the purchase price was supposed to go to Anthony, but under a vesting schedule.

Very difficult to answer this with specificity, but in general there are a number of factors that influence the amount of cash you ultimately net from a sale, including:

- Cap table: what % is owed to other founders, investors, employees, etc?

- The total acquisition price may include substantial legal and other fees that will lower the actual amount received by the owners or shareholders.

- How much of the acquisition is financed through cash vs. equity? Equity may vest over a certain time period, and be subject to certain requirements (your sustained performance, ability to clear legal scrutiny, etc.).

- Taxes.

Taking all of this (and probably more) into consideration, it doesn't seem unreasonable for a founder to ultimately net <10% of the total sale price. Again, this is all wild speculation in this particular case.

His company existed for a seven months in 2016 before being bought by Uber. It isn't clear (to me) if there were third party investors or what the cap table was, broadly. Purportedly 90 employees at time of sale to Uber.

his contract to sell w uber had a significant earn out, the 680m was based on hitting different tech milestones. He hit none of them before he was fired.

Why would you ever “sell” a company under such conditions? “We pay you $1T if you write a simple loop in the next two days.” Next day when you come to work: “Fired LOL. Do not cross Start, do not collect $1T.”

While this is a crazy example, I have been in very similar kind of position (not $1T for a loop, though) and been worried about the strong motivation to get rid of me on certain N+364 day timelines. It didn't happen and I was treated quite honorably. I think if you want your acquisitions to go well, you don't do cheesy stuff like firing people to save money (when the integration is otherwise going quite well) or else your future acquisitions will be harder. People talk.

Usually you don't agree to contracts that let you be fired for the sorts of things that don't end up with you in court. Buyers, being reasonable, refuse to sign contracts where they can't fire you for being a criminal.

The difference between a court and a contract like that is that the court is impartial and has a clear bar of criminality ("innocent until proven guilty" to some standard of proof), whereas it's always in the company's interest to fire you at a mere accusation of a potential crime (or non-criminal wrongdoing)...

Which is why, when you're selling a company for hundreds of millions of dollars in unvested stock, you don't sign a deal where the buyer can fire you for "mere accusations of a potential crime". Uber lost the lawsuit with Google and had to pay a quarter of a billion dollars. I'm sure their contract said something like "if you have materially misrepresented information to us that results in us getting sued for a quarter of a billion dollars, we can fire you".

Even if the contract doesn't say anything like that, they can still fire you. Misrepresenting information as part of contract negotiation is fraud.

Because that's a trick that only works once for the buyer so you know they're not going to pull it. It may not even work that one time because you'll tie them up in court.

Ah, that's some important detail I was missing. Thanks.

I don't know what the CGT situation is in America, but in Australia of you own an asset (shares, property, etc) for less than 12 months before sale, capital gains tax kicks up to about 50%.

Australian here as well.

If you own things and sell them for a capital loss you get a tax credit to use later.

If you sell for a capital gain within 12 months then you will pay tax on the full amount of profit from the sale. For individuals this is just added to your income tax.

If you sell for a capital gain having held the asset for over 12 months you get a 50% discount to how much profit is taxed.

The tax credit for a capital loss can be used to offset a capital gain but it gets applied before any discount is applied.

I am not an accountant but I have listened to one.

That sounds essentially similar to the US system except that the US long-term capital gains tax rates are not exactly 50% of income rates. They're 0% of income rates on the low end, approximately 53-68% in most of the middle tax brackets, and 64% at the high end.

Typically you have to hold assets for a year for them to be taxed as capital gains. Otherwise it's just normal income, which caps out at 37%. Capital gains maximum rate is 20%.

37% for Federal plus State tax and CA taxes cap gains, both short and long the same. Very possible to end up at ~50% rate in CA.

Pedantically, the max cap gains rate is 23.8% with NIIT. (Also, these are the federal tax brackets; states can and mostly do impose additional taxes on both income and capital gains.)

Australian here.

That doesn’t sound right.

CGT operates by treating net capital gains as taxable income in the tax year in which an asset is sold or otherwise disposed of. If an asset is held for at least 1 year then any gain is first discounted by 50% for individual taxpayers, or by 33.3% for superannuation funds. Capital losses can be offset against capital gains. Net capital losses in a tax year cannot be offset against normal income, but may be carried forward indefinitely.

https://en.wikipedia.org/wiki/Capital_gains_tax_in_Australia

Maybe the 50% your thinking of come from this?

For most CGT events, your capital gain is the difference between your capital proceeds and the cost base of your CGT asset. (The cost base of a CGT asset is largely what you paid for it, together with some other costs associated with acquiring, holding and disposing of it.)

There are three methods for working out your capital gain. You can choose the method that gives you the best result – that is, the smallest capital gain.

CGT discount method

Eligibility: For assets held for 12 months or more before the relevant CGT event. Not available to companies. For foreign resident individuals, the 50% discount is removed or reduced on capital gains made after 8 May 2012.

Description: Allows you to reduce your capital gain by 50% for resident individuals (including partners in partnerships) and trusts 33.33% for complying super funds and eligible life insurance companies.

How to do it: Subtract the cost base from the capital proceeds, deduct any capital losses, then reduce by the relevant discount percentage. See: The discount method. Indexation method

Eligibility – For assets acquired before 11.45am (by legal time in the ACT) on 21 September 1999 held for 12 months or more before the relevant CGT event.

Description: Allows you to increase the cost base by applying an indexation factor based on the consumer price index (CPI) up to September 1999. How to do it: Apply the relevant indexation factor, then subtract the indexed cost base from the capital proceeds. See: The indexation method. Other method

Eligibility: For assets held for less than 12 months before the relevant CGT event. Description: Basic method of subtracting the cost base from the capital proceeds. How to do it: Subtract the cost base (or the amount specified by the relevant CGT event) from the capital proceeds. See: The 'other' method.

https://www.ato.gov.au/General/Capital-gains-tax/Working-out...

The total deal with Uber was worth about 20M upfront. The rest was milestone driven. Milestones didn’t happen bc Anthony got fired and there was a fatality that shut the program down.

Or maybe he off-shored the rest of his money? This < $100mil are the assets that are under his name and the rest are in tax havens/under different shell companies? Not sure whether that is possible. But it seems like rich people always have multiple ways of hiding their money.

This is a mid-century Hollywood myth that just won't die. Even when it was still possible to do so, a tiny, tiny minority of Rich Americans were actually evading taxes by hiding money overseas.

Today, it's virtually impossible to hide money overseas as an American after FATCA and various other crackdowns unless you are willing to entirely give up your US citizenship. Since the $USD is the reserve currency of the world, the US government has enormous leverage in mandating foreign banks to report on the assets of every single US citizen with money abroad.

In fact, foreign banks are so scared right now, many will refuse to even deal with Americans outright. It's a huge draconian nightmare for expats--99% of whom are not rich by any means.

Ironically, if you're looking to do something nefarious, the best place to do so is actually right here in the US! Numerous states allow you to create anonymous corporations and trusts.

Have you ever heard of the Panama Papers?

The above is the reason why there were very few Americans in those papers. They're not worth the risk.

Most founders make nowhere near the actual sale price for a VC-funded company, and Otto had 4 co-founders.

I wonder if he missed out on his earn out because he was fired from Uber. I’m not sure how that all works legally. Anyone know?

yolo'ed it all on r/wallstreetbets.

Now that hits close to home -- I mean, if he'd timed the drop, he'd probably be a trillionaire by now.

Counterparty risk; something the WSB crowd is going to painfully learn in the next few months :P

Are you predicting banks going insolvent?

- Beer virus is about to eat Seattle and SF Bay Area. If it does... then it will eat all the US eventually. Hospitals overrun etc. People won't be working. Most disruptive event since WW2.

- Supply chains run dry mid April. Huge supply shock... and will be arriving right as the beer virus starts to crush the west coast.

No one has a risk model that can price those things. It's entirely possible large institutions will go insolvent in the chaos.

Seems like a pretty big assumption that those two cities would be eaten. It's definitely spreading and causing disruption, but I don't really see how it's going to grind both cities to a halt. Especially with the current amount of information we have regarding the virus. We need to know more before we can draw such conclusions. China seems to be recovering already.

People are working in China right now, but boy is this getting off topic

He bought a large house in Florida?

That's an asset.

I think GP is referring to Florida’s generous homestead exception, which allows a debtor to keep his/her home (regardless of opulence) despite creditors’ claims.

Doesn't that mean you're a poor person trying to pay for upkeep of an expensive house? If you sell it they will come take that cash.

You live in the pool house and rent out the mansion to college kids.

To the extent you rent it out, it's an income property not a primary residence, right?

You keep a spare bedroom for yourself so they can be roommates.

Ah interesting, didn't know about that. Seems like a easily exploitable loophole if so.

Maybe for cases like this that involve literally millions of dollars, but it really helps normal people from becoming homeless if they fall on hard times for whatever reason.

Source: Family members went through bankruptcy in Florida and were able to get back on their feet much quicker because their house couldn't be seized.

Most states have a homestead exemption. But most states also have a limit on the value of that homestead.

Sure, you shouldn't lose your reasonable family home over debt. But that doesn't mean people like OJ Simpson should be able to keep their multi million dollar estates even though they have filed for bankruptcy.

California’s homestead exemption is $75,000, which won’t even get you a parking spot in San Francisco.

It's a little more complicated than that and it's also $100k for married couples and goes up if you are elderly.

In order for a creditor to take a lien on your home after a bankruptcy proceeding in CA, I believe they need to prove that after a Sheriff's sale (which generally does not get market value), there will be more than the exemption limit left over after all the mortgage and taxes and fees are paid.

If they can't then they won't be able to levy your home and force a sale. So in a worst case scenario, you would need to take out an additional mortgage or heloc on the available equity in your home to bring the total available equity under the exemption limit ($75k+) and then pay that money towards the bankruptcy debt.

So basically what is happening, is you get to keep your home, but you are forfeiting all you home owner's equity that exceeds the exemption limit.

And even in this case. Does Anthony Levandowski deserve to become homeless and destitute for what he did? No.

This is going to hurt him far, far more than what he did could ever have hurt Google. Yeah, maybe Google would have lost more than this on paper, but definitely not in terms of marginal utility. Google remains an extremely wealthy and powerful company and now Anthony is broke.

Google's purpose was to set a ruthless precedent. It's a powerful reminder that once at Google, you're an employee and not an entrepreneur.

It’s kind of Google’s fault for continually buying companies he started while working there.

He should've gone to jail, like people are supposed to when they commit fraud.

Fraud? What? This trial hasn’t even gone to court. You’re making blanket statements about someone’s life based on accusations from a Big Tech company and their PR teams. This person has been accused -not convicted and is going bankrupt because he is fighting Google. I know this is a Bay Area forum - half of you probably work for Google but give me a break. They steal personal information from everyone who uses their products every single day. They buy up an competition - they don’t play fair. They are the largest advertising company in the world - let’s not pretend like they’re more than that. Or they are some virtuous company that wouldn’t personally go after someone who is a threat to them and working with a competitor. Destroying others so theirs is positioned to raise 2 Billion dollars. This guy just got caught in the crossfire. This is just parroting headlines.

Ah, the American "ooga booga" defense. You can never really know anything, since everything is speculation! This is just lawyer-speak!

There is moral hazard written all over this, and you are either too naive to see it or are trying to defend the stacked kangaroo courts of American criminal proceedings for employees of large multinational corporations.

We know that the guy stole proprietary technology and maybe there might have been intentions to use it by Uber, BUT there's no proof tying it to Uber (of course). As always. These guys aren't dumb enough to make the mistakes that Microsoft made in the 90's.

He may go to prison. He is facing a 33 count federal indictment. The trial is scheduled for January 2021.

Remember you may be able to claim an exemption on your $5m estate but you need to pay the taxes and electric bill and it’s hard to do that when up to 75% of anything you make beyond minimum wage is garnished (I don’t think any state even allows this much but maybe). To be fair some states only allow up to 25%. And some states you cannot garnish at all, you can only levy bank accounts

It’s is, but the benefits outweigh the moral hazard.

Times are tough.

>I wonder how he doesn't have more assets after he sold his company to Uber for $680 millions

He may have realized early that Bitcoin is unconfiscatable.

I'm not sure how serious your were with the comment, but law enforcement and customs agencies around the world hold now considerable amounts of bitcoins.