Posts by Aaron Pressman

  • Billion-dollar startups offering million-dollar paydays

    Aaron Pressman at Yahoo Finance 1 day ago

    Venture capitalists have fueled a boom in so-called unicorn startups, companies valued at $1 billion and up. Now software engineers and developers are setting a target of their own -- $1 million pay packages -- to go work for the unicorns. Companies ranging from ride-hailing giant Uber to grocery delivery service Instacart to cybersecurity specialist Tanium are offering compensation packages to software experts in high-demand areas worth $1 million and up, recruiters and venture capitalists say. To reach $1 million, however, the packages count a few years of salary at $150,000 to $175,000 plus equity that vests over several years and may or may not ultimately be worth as much as it is today. "For startups with $1 billion-plus valuations, they're willing to pay aggressively and offer stock," says Scott Purcell, a division manager at recruiter Jobspring Partners in San Jose, Calif., who focuses on developers and big data experts. The big appeal of stock from unicorns is that "with a large, private company, it's already worth something." The offers come as VC money pours into startups at a heady pace not seen since the Internet bubble. In the second quarter, venture capitalists invested $17.5 billion to back startups, the highest total since the fourth quarter of 2000, according to a report from PricewaterhouseCoopers and the National Venture Capital Association. Equity-heavy compensation packages make sense given the battles over the most sought-after engineers, says Jeff Bussgang, general partner at Flybridge Capital Partners. "We are in the midst of a talent war and there's no truce anticipated," Bussgang says. The best engineers are worth 10 times more than a mediocre developer, but huge differentials in cash salaries wouldn't go over well. "It is against social norms to offer 10 times the cash to a 25-year-old as compared to their cube mate," Bussgang says. "So, equity is the best tool."  More money freed up for salaries Talent wars for engineers in Silicon Valley are nothing new, of course. Software engineers on average make $134,000 in the Valley and benefit from all kinds of lavish perks, from free lunch and dry cleaning to private Wi-Fi-enabled bus rides to and from the office. Steve Jobs even conspired with some of his fellow CEOs to stop poaching each other's workers and hold down salaries. But it isn't just the amazing amounts of money flooding into the unicorn start-ups that's changed the market. Companies' ability to spend more of venture capitalists' resources on engineering talent is also a result of the declining cost of other aspects of startups. In the 1990s, companies spent huge sums on hardware to build their own server farms and online infrastructure. Now they contract out to Amazon (AMZN) and other providers on an as-needed basis, explains Dave Carvajal, a co-founder of the web site HotJobs in the 1990s and now the CEO of his own recruiting firm, Dave Partners.    "The thing that's really changed is the cost of computing has gone down so significantly," Carvajal says. "Today the best and highest use of capital is for people." Uber's pitch to in-demand mobile app developers can include one- or two-thousandths of 1% of equity in the San Francisco-based startup. That doesn't sound like much until calculated against Uber's recent private valuation of $51 billion. Two-thousandths of 1% of $51 billion is just over $1 million. Uber did not respond to a request for comment. Of course, packages from Uber or other "unicorns" won't be worth close to $1 million if valuations collapse like they did at the end of the first Internet bubble. The debate over whether the market is in the midst of another tech bubble fueled by flowing VC money rages on. Uber is the most valuable of all the 140 known "unicorns," according to data from CB Insights. So lesser-valued startups must offer somewhat larger slices of equity to hit the desired $1 million package value. Last month, longtime VCs Jim Breyer and Bill Gurley sounded off about their fears of a bubble. Others, like CEO Marc Benioff and a trio of analysts at Andreessen Horowitz, maintain there's less risk in the market than feared. Another firm making big offers for engineers is grocery-delivery service Instacart. In a heated battle with Amazon to crack what's previously been a low-margin black hole for startups, Instacart raised $220 million in January at a $2 billion valuation. Now it's offering as much as a few hundredths of 1% of the company plus salary for top talent, some recruiters say. The company declined to comment on compensation. "The engineers at Instacart are solving for very complicated and robust challenges, so we compensate them accordingly," spokeswoman Amanda Henneberg said. Tanium and Medallia, a startup aimed at improving customer service that's also mentioned by recruiters in the $1-million-offers club,  declined to comment.

  • Twitter expected to name Jack Dorsey as permanent CEO

    Aaron Pressman at Yahoo Finance 3 days ago

    Twitter's (TWTR) board of directors plans to name Jack Dorsey the company's permanent CEO without requiring the him to step down from his post as CEO of payments startup Square, the web site Recode reported on Wednesday. Dorsey, who helped found Twitter before moving to Square, was named interim CEO in June after then-top exec Dick Costolo announced his surprise resignation. The official word on Dorsey could come as early as Thursday, Recode reported, citing unnamed sources. Shares of Twitter, which have been trading around the company's initial public offering price of $26 a share for the past two months, initially jumped 4% on the news to a high of $27.33. But the bump was short-lived and shares fell to $26.23 in later afternoon trading, the same level as before the Recode report.

  • Uber execs on trial in France face jail time, heavy fines

    Aaron Pressman at Yahoo Finance 3 days ago

    The trial of two Uber executives kicked off in France on Wednesday, the latest front in the fierce battle between the popular ride hailing service and the taxi industry there. But the judge in the case quickly decied to delay further proceedings until mid-February. Uber France chief Thibaud Simphal and Pierre-Dimitri Gore-Coty, general manager for Western Europe, could be sent to prison for up to five years and fined as much as 300,000 euros if found guilty of deceptive commercial practices and other charges. After some initial skirmishing by lawyers on the case, Judge Cecile Louis-Loyant said a five-month delay was needed to give prosecutors time to provide documents and computer files requested by Uber, Reuters reported. The rapidly expanding ride hailing service has run into numerous obstacles and widespread opposition from taxi companies around the world. Uber has been banned in Belgium, Spain and some parts of India among other regions. Valued at $60 billion by its venture capital investors, Uber's services match drivers and riders in hundreds of cities worldwide via mobile phone apps. But taxi owners say Uber, which isn't subject to the same regulations in many cities, poses unfair competition.

  • Music industry watches closely as Apple Music free trials expire

    Aaron Pressman at Yahoo Finance 11 days ago

    Apple Music hits its three month anniversary next week and, to paraphrase an old Warren Buffett saying, we're about to see how many people are listening naked when the tide goes out. Apple's (AAPL) streaming music service costs $10 a month and does not have a free-with-advertising tier, a popular option on Spotify, Deezer and many other rivals. Apple's service kicked off on June 30 with a 90 day free trial for anyone who signed up. But those early adopters will have to decide whether to begin paying for the service September 30.

  • More attacks coming after biggest hacker breach in Apple app store

    Aaron Pressman at Yahoo Finance 11 days ago

    Apple's ( AAPL ) iPhone app store was penetrated by hackers who infected hundreds of apps with malware -- including the Chinese version of Angry Birds 2 and WeChat -- but the malevolent programmers didn't actually crack Apple's security, they bypassed it. The hack, which started by infecting tools Chinese developers use to write apps , is a harbinger of many to come for smartphone users, security experts warn. And that gives consumers just one more security risk to worry about amid a wave of online credit card theft, digital identity poaching and rampant Internet hacking. "Apple has done a great job diligently protecting the app store and there really hadn't been a lot of intrusions," says Ryan Olson, director of threat intelligence at Palo Alto Networks ( PANW ), which helped uncover the hack . "This case is really different." Apple has multiple safeguards to prevent hacked apps or malware from getting into the app store in the first place and includes numerous features in its iOS software to further secure the iPhone once apps are installed. The twist in this case is that the hackers targeted app developers instead of writing their own infected...

  • Apple isn't killing Google but it might generate some pain

    Aaron Pressman at Yahoo Finance 17 days ago

    It's that time of year -- Apple (AAPL) is out with its annual software upgrade for hundreds of millions of iPhones, and pundits are out with their annual predictions of which companies Apple is about to kill. Few of those predictions ever come true, but it's still fair to assess which companies may be hurt, or at least put at risk, from changes in the new iOS 9 software Apple rolled out today for iPhones and iPads.

  • Verizon planning more generous trade-in offer for old iPhones

    Aaron Pressman at Yahoo Finance 22 days ago

    Verizon Wireless (VZ), the top U.S. carrier, doesn't like to engage in price wars, but the company will be offering more generous iPhone trade-in allowances for customers buying the new iPhone 6S and 6S Plus, Yahoo Finance has learned. Customers will be able to apply the trade-ins, of up to $400, immediately toward the purchase of new Apple (AAPL) iPhones to reduce either the full cost or monthly installment plan payments. But Verizon is still requiring that customers buy a new phone, rather than offering some of the lower-cost leasing deals its rivals are pitching.

    All of the carriers are seeking to entice a huge wave of Apple fans expected to upgrade from earlier models when the new iPhones are available for pre-order at 3 a.m. EST on Sept. 12. And this year, Apple introduced its own installment and early upgrade plans to make it easier for customers to buy iPhones directly from the maker and skip buying from the carriers altogether. So the carriers are getting more creative competing not just with each other but also with Apple.


  • Price war breaking out over iPhone upgrades

    Aaron Pressman at Yahoo Finance 23 days ago

    The big wireless carriers may have curbed their price wars over the summer, but thanks to Apple (AAPL), they're suddenly getting aggressive about iPhone prices. T-Mobile (TMUS) CEO John Legere took to his blog on Thursday to announce that customers could get an iPhone 6S on his company's Jump on Demand upgrade program for only $20 a month. Sprint (S) says its customers can pay as little as $15 per month for the new iPhone if they trade in their old phone (otherwise it's $22 monthly). Both offers allow customers to trade in their 6S for next year's new Apple model at no additional charge. Those prices undercut AT&T (T) and Verizon's (VZ) current monthly prices for iPhones, which generally start at $27 a month for two-year plans without upgrade rights, as well as Apple's own brand new installment payment and upgrade plan offerings. Of course, customers get to keep their old phones at the end of two years on those plans -- the upgrade plans require that the old phones be returned to the carrier. There should be more news soon. AT&T is expected to come out with a new iPhone offer imminently, while Verizon has reportedly already been emailing some customers with early upgrade offers. Apple ignited the latest round of iPhone upgrade excitement at a keynote address in San Francisco on Wednesday where it unveiled the iPhone 6S and 6S Plus. The new phones have a couple of enticing features for users, like improved cameras and "3D touch" screens, along with the new option to buy directly from Apple and pay in monthly installments. Yahoo Tech's Dan Howley has a rundown of everything Apple unveiled. Apple doesn't sell the most phones in the world, but it's hard for other phone makers to match the devotion of Apple customers. Even before the keynote had begun, some iPhone fans lined up outside Apple stores for the phones, which won't be available for pre-order until Sept. 12 and delivery until Sept. 25. Carriers have found selling iPhones is critical for attracting many customers -- CEO Legere has said getting the iPhone into T-Mobile's line-up was one of his top priorities when he took over the company three years ago.

  • Apple shares slump as new products fail to surprise

    Aaron Pressman at Yahoo Finance 24 days ago

    Apple ( AAPL ) took a hit after the company unveiled a slew of new products on Wednesday. Shares of Apple had been trading up 1% to $112.81 before CEO Tim Cook took the stage in San Francisco to show off upgraded iPhones, a new larger iPad and a more capable, game-playing Apple TV. But the shares slumped to close at $110.15 after the two-hour presentation, down almost 2% on the day. That rise and fall mirrored the action in the overall market. The S&P 500 was up about 1% in morning trading but slipped to a loss of 1.4% by the close. Investors have been growing increasingly concerned over the past few months that the world's biggest tech company may be running out of room to grow. Concerns are also rising that economic problems in China, where Apple has experienced the majority of recent growth, could hurt iPhone sales there. Apple's shares have lost 14% over the past three months. The debut of new products did little to mitigate those concerns, although investors have often underestimated the allure of Apple's upgrades in the past. Wall Street analysts are expecting almost no growth in iPhone sales over the next two years, according to FactSet data. There were few...

  • Average cable bill hits a record $99, but can it last?

    Aaron Pressman at Yahoo Finance 24 days ago

    The average cable television bill hit a record $99.10 this year, an increase of 39% from 2010. But with more and more viewers opting out of pay TV -- mainly because of the cost -- something's got to give. According to the latest annual survey by Leichtman Research Group , 83% of U.S. households subscribe to cable, down from 87% in 2010.  The average cable bill is up 39% over the same period, or more than four times the rate of inflation, the telephone survey of 1,222 people found. Media stocks have been sinking all summer amid plunging ratings and rising fears that cable viewers are opting out, or in the case of millennials, never even signing up in the first place. Shares of Viacom ( VIA ) are down 32% over the past three months, while CBS ( CBS ) has dropped 27% and Twenty-First Century Fox ( FOXA ) 18%, versus a 5% decline in the S&P 500 Index over the same period. At the same time, Internet video options continue to multiply, with Verizon ( VZ ) the latest to launch an online alternative to traditional TV. That follows other new options introduced over the past year by CBS, Dish Network ( DISH ) and HBO. Apple ( AAPL ) is rumored to be working on its own Internet...