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The No. 2 executive at daily-deals purveyor Groupon, Rob Solomon, has taken advantage of the company’s unlimited-paid-days-off policy — for good.
In an email to Groupon staff that was forwarded to VentureBeat, CEO Andrew Mason announced that Solomon (pictured), who joined Groupon just a year ago, is leaving the Chicago-based company to move back to northern California. (It’s not clear how settled Solomon ever was in Chicago: He never changed the location in his LinkedIn profile from “San Francisco Bay Area.”)
The story that sources close to Groupon’s board are peddling around town is that Solomon wasn’t the right executive to take Groupon, whose staff grew an astonishing thirtyfold from 200 to more than 6,000 employees under Solomon, to its “next stage of growth,” which appears likely to include an IPO.
I’m not sure I buy that, since Solomon was formerly an executive at Yahoo during its heyday, when it was a much bigger company than Groupon, and already public. (To be fair, I may be favorably inclined to Solomon, since he seems very ready to take VentureBeat’s advice on business matters.)
Here’s an alternate theory: Working for Groupon’s puckish, prank-prone CEO took its toll. A quick payday in the form of a sale to Google or another large company never materialized.
But the rise of secondary markets in the shares of private companies like Groupon affords lucky souls with impeccable timing another kind of exit. With Groupon now potentially worth $25 billion, Solomon must now be very wealthy even with only a percentage of his equity vested — so much so that the long slog of vesting the rest might not seem worth it.
So now, fast-growing companies like Groupon are seeing the downside of secondary markets. The presence of investors willing to take a gamble on private-company shares and the rise of marketplaces like SharesPost and SecondMarket for those equities is making it hard to keep executive like Solomon down on the farm — or in Chicago, as the case may be. When they can easily sell their shares even without an exit like an acquisition or an IPO, why should already-wealthy executives stick around for the hard work or the daily friction that comes with a company in hypergrowth?
It’s a new management headache for the likes of Mason. Our only advice for the Groupon founder: Look to your past as a musician, and figure out a way to keep the band together.
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