I was surprised by the contents of two blog posts I read over the weekend on the same topic. In his post Web 2 bubble ain’t popped yet: Kiko sells for $258,100 Robert Scoble writes
How many employees did Kiko have again? Three, right? Well, they just sold their “failure” for $258,100. Not too shabby!
On the same topic, Om Malik writes in his post Kiko Sells for $258,100
The company recently became talk of the blogs, when the founders decided to cut their losses, and put the company on sale on eBay. Niall and I devoted a big portion of our latest podcast, Snakes on a Business Plan to the Kiko affair. Well, the auction just closed and brought in $258,100. A tidy sum! This explains why Paul was smiling today at The FOO Camp " src="http://gigaom.com/wp-includes/images/smilies/icon_wink.gif"> Apparently, Kiko’s angel round was $50,000 in convertible debt, and this sale should cover that. Graham’s YCombinator which did the seed round could come out ahead as well.
I'm confused as to how anyone can define this as good. After you take out however much the investors get back after investing $50,000 there really isn't much left for the three employees to split especially when you remember that one of the things you do as the founder of a startup is not pay yourself that much. At best I can see this coming out as a wash (i.e. the money made from the sale of Kiko is about the same as if the founders had spent the time getting paid working for Google or Yahoo! as full time employees) but I could be wrong. I'd be surprised if it was otherwise.