4 ms·

Yes, Square's private per share prices: Series A: $0.21627 Series B: <$1 Series C: $5.79817 Series D: $11.014 Series E: $15.46345 IPO @ $9 is not great fo

by gatsby 11y ago

Yes, Square's private per share prices: Series A: $0.21627 Series B: <$1 Series C: $5.79817 Series D: $11.014 Series E: $15.46345 IPO @ $9 is not great for lots of folks, but mostly late-stage employees (assuming D & E investors have a liquidation preference - though I don't know for sure).

russell_h 11y ago
Series E investors got a ratchet guaranteeing $18.56 per share: http://techcrunch.com/2015/11/10/squares-s-1-of-ratchets-and-unicorn-valuations/ http://techcrunch.com/2015/11/10/squares-s-1-of-ratchets-and...
- 001sky 11y ago
  what about the common? i think that was the gist of the comment...do the ESOPs pay out in preferred? edit: below comment mentions using comp rsus
  - harryh 11y ago
    Strike prices on common are almost always far far below what investors are paying for preferred shares.
    - gohrt 11y ago
      I thought they were priced at the last round price (which is usually a discount if you interpolate the prce between rounds)
      - harryh 11y ago
        Nah, there's a big discount because preferred shares have downside protection (as well as a few other valuable things general) so common stock is valued lower. Generally a 70% discount or so.
        elsewhen 11y ago
        the discount varies by investment round. common shares for early stage companies come with a huge discount. or perhaps it is clearer to say that preferred shares come with a huge premium primarily because the liquidation preference (LP) is so valuable at that stage). preferred shares in later rounds have a much lower premium, because investors don't value the LP as much.
      - zaroth 11y ago
        I've had this happen, and it's wrong. The price must be adjusted based on the terms. Common stock has basically no terms, so strike price should be much, much lower than what investors are paying for preferred.
stevecalifornia 11y ago
Just went through an IPO and we had a stock split to bring the price down to a number around $14. Square could also be doing a split so that $9 doesn't mean D & E are getting screwed.
- harryh 11y ago
  That's not how stock splits work. You can't somehow subvert a falling valuation just by creating more shares.
- hueving 11y ago
  a stock split doesn't account for the lower total evaluation.
c-slice 11y ago
This is for preferred stock though, not for common stock. Employee options would be priced to common stock.

by gatsby 11y ago

russell_h 11y ago

Series E investors got a ratchet guaranteeing $18.56 per share: http://techcrunch.com/2015/11/10/squares-s-1-of-ratchets-and-unicorn-valuations/ http://techcrunch.com/2015/11/10/squares-s-1-of-ratchets-and...

001sky 11y ago
what about the common? i think that was the gist of the comment...do the ESOPs pay out in preferred? edit: below comment mentions using comp rsus
- harryh 11y ago
  Strike prices on common are almost always far far below what investors are paying for preferred shares.
  - gohrt 11y ago
    I thought they were priced at the last round price (which is usually a discount if you interpolate the prce between rounds)
    - harryh 11y ago
      Nah, there's a big discount because preferred shares have downside protection (as well as a few other valuable things general) so common stock is valued lower. Generally a 70% discount or so.
      - elsewhen 11y ago
        the discount varies by investment round. common shares for early stage companies come with a huge discount. or perhaps it is clearer to say that preferred shares come with a huge premium primarily because the liquidation preference (LP) is so valuable at that stage). preferred shares in later rounds have a much lower premium, because investors don't value the LP as much.
    - zaroth 11y ago
      I've had this happen, and it's wrong. The price must be adjusted based on the terms. Common stock has basically no terms, so strike price should be much, much lower than what investors are paying for preferred.

stevecalifornia 11y ago

Just went through an IPO and we had a stock split to bring the price down to a number around $14. Square could also be doing a split so that $9 doesn't mean D & E are getting screwed.

harryh 11y ago
That's not how stock splits work. You can't somehow subvert a falling valuation just by creating more shares.
hueving 11y ago
a stock split doesn't account for the lower total evaluation.

c-slice 11y ago

This is for preferred stock though, not for common stock. Employee options would be priced to common stock.