Buffer The Buffer team.
Selling the company "would have been a life-changing event," COO Leo Widrich tells Business Insider, "and not just for the founders, but employees, too."
Over the summer, he and the leadership team got everybody together on a Google Hangout to announce the happy news: They were turning the latest offer down.
Widrich and CEO Joel Gascoigne said that they wanted to be running Buffer for a long time.
"But what does that do for stock options?" an employee replied.
Widrich was completely taken aback - stock options weren't considered at all in the decision-making process.
They would have to go back to the drawing board. If they didn't want to sell the company, how could stock options make their value actually materialize? And how could the nearly 4-year-old company bring in investment without giving up control?
Buffer Buffer's monthly recurring revenue.
"This idea of a big exit in 10 years is antiquated," Widrich says.
The normal startup drill is that the company raises round after round of funding, thereby diluting the value of the stock options handed out to employees. The options are worth less and less over time.
So Widrich, Gascoigne, and the rest of Buffer's leadership team decided to go radically transparent. Widrich and Gascoigne have long emphasized transparency as a value: They made their salary formula transparent late last year, and they did the same with equity in April.
Increasingly, transparency is becoming a best practice in the startup world: Basecamp CEO Jason Fried blogs openly about running his company, while Tony Hsieh has baked transparency into the culture of Zappos since the beginning.
Now Buffer is bringing transparency to funding.
Starting today, Buffer is raising $3.5 million in funding at a $60 million valuation - publically.
A million of that will go to company growth, the other $2.5 million will provide a bit of liquidity to the founders and early team members, who can sell their stock options as part of the investment round.
Buffer has already pulled in three investors: Collaborative Fund, Red Swan, and the Vegas Tech Fund.
There's still
If you want to take part, head to Buffer's AngelList listing.
Widrich hopes it will help change the model for how funding works.
"There are some people who will sell 5,000 shares, which gives them $30,000 or $50,000," Widrich says. "It helps with the downpayment of their house or the mortgage."
It sets the precedent while Buffer is still small, he says. And those who keep their shares can obviously wait until Buffer is worth three, four, or five times more.
"It's more like showing people, 'Hey, this is becoming real, that your stock options will materialize,'" Widrich says, "instead of you joining and saying 10 years from now if we ever IPO, you get some of that stock."