(http://readwrite.com/files/styles/800_450sc/public/fields/david-karp-flickr-web09.jpg) On Monday, Yahoo announced it was buying Tumblr, the blog network, for $1.1 billion. And then the tweets started, with people declaring that Tumblr founder David Karp was now a billionaire.
The conflation of Tumblr's purchase price with Karp's net worth assumed that Karp got nearly all of the Yahoo payday. And that's simply not how it works for venture-backed startups. Investors like Union Square Ventures and Andreessen Horowitz will share in the take, with Karp getting an estimated $275 million.
(See also: Tumblr's Perverse Lesson: To Get Rich, Don't Make Money (http://readwrite.com/2013/05/21/silicon-valleys-perverse-disincentive-to-make-money))That's a lot of money, but it won't get him on Forbes' list of the world's billionaires (http://www.forbes.com/billionaires/list/).
You try explaining this to people on Twitter, though.
From high school drop out to billionaire: previously coy Karp cashes in on Tumblr smh.com.au/it-pro/busines... (http://t.co/zwXNggsBRD)
— Sandra Sully (@Sandra_Sully) May 20, 2013 (https://twitter.com/Sandra_Sully/status/336328129264103424)
David Karp (26) now a billionaire after Yahoo! agrees to buy Tumblr news.com.au/technology/yah... (http://t.co/LmCoTBzvrQ) Thx #FF (https://twitter.com/search/%23FF) @josepheach (https://twitter.com/josepheach) @sanddragger (https://twitter.com/sanddragger) @conservotop (https://twitter.com/conservotop)
— Joey Myers Jr. (@JoeyMyersJr) May 20, 2013 (https://twitter.com/JoeyMyersJr/status/336312813431705600)
Funny how people think that the founder of a venture backed company sold for $1.1b is somehow a billionaire
— David Galbraith (@daveg) May 20, 2013 (https://twitter.com/daveg/status/336470395379126272)
David Karp--High school drop-out to billionaire stuff.co.nz/technology/dig... (http://t.co/szJ8ssH6if) I too have no clue why anyone needs to go to school for 12yrs #Tumblr (https://twitter.com/search/%23Tumblr)
— Tolstaja Zhirniavka (@tolstunka) May 20, 2013 (https://twitter.com/tolstunka/status/336534055086612481)
Sadly, even some respectable publications like Australia's
Sydney Morning Herald made the error:
From high school drop-out to tech billionaire: Meet David Karp. ow.ly/lbRIw (http://t.co/WcRNzmHNEy) #Tumblr (https://twitter.com/search/%23Tumblr)
— smh.com.au (@smh) May 20, 2013 (https://twitter.com/smh/status/336437525759533056)
Other people asserted that Karp was a "high-school dropout." That's actually a debatable point. He left high school to continue his education through home schooling, and never received a formal diploma.
I hate how the media is referring to David Karp as a "high school dropout". Like, yeah he's a dropout but now he's a hot billionaire.
— Trey Amandus Bennett (@trey_amandus) May 20, 2013 (https://twitter.com/trey_amandus/status/336570180215906304)
Vespa lover, yes. Billionaire, no.
Who knew that newly billionaire @davidkarp (https://twitter.com/davidkarp) likes to ride Vespas? nym.ag/163cMDH (http://t.co/noNy59LISu) #VespaVita (https://twitter.com/search/%23VespaVita)
— Vespa USA (@VespaUSA) May 20, 2013 (https://twitter.com/VespaUSA/status/336591773398876160)
And Business Insider's Henry Blodget tried to resolve the issue with punctuation:
New York tabloids discover @davidkarp (https://twitter.com/davidkarp), the city's newest ~billionaire tech god read.bi/11RmFms (http://t.co/L6FJqjlFxL)
— Henry Blodget (@hblodget) May 20, 2013 (https://twitter.com/hblodget/status/336460536961200128)
Related stories:- Who Hates The Yahoo-Tumblr Deal? Tumblrers, That's Who (http://readwrite.com/2013/05/20/who-hates-the-yahoo-tumblr-deal-tumblrers-thats-who)
- Buying Tumblr Will Leave Yahoo With The Same Old Identity Crisis (http://readwrite.com/2013/05/19/tumblr-yahoo-identity)
Photo by Web09 (http://www.flickr.com/photos/web09/3460412549/)ReadWrite