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How are snapchat employees making out here? It seems like share dilution and even more investors getting exit preference has got to be eroding value like crazy.

How are snapchat employees making out here? It seems like share dilution and even more investors getting exit preference has got to be eroding value like crazy. Perhaps someone with some experience can shed some light here, if you joined snapchat 2 or 3 years ago are you seeing all of your supposed value evaporating away?

imaginenore 10y ago
You're forgetting that the valuation of the company has been growing exponentially https://media.licdn.com/mpr/mpr/shrinknp_800_800/AAEAAQAAAAAAAAibAAAAJDA0MmU1YzZjLTE5MDctNDFlYS1iNDkxLTE0Yjg2OTZkMTE5Zg.png https://media.licdn.com/mpr/mpr/shrinknp_800_800/AAEAAQAAAAA... With this latest round it exceeds $20 billion.
- cassieramen 10y ago
  This is part of what I'm asking. The valuation is growing, as is the amount of money their taking. That means the company now has to exit for that much more in order for employees to see any return. If I'm an early employee I now have to hope they exit for $X billion for my shares to be worth anything. If they exit for less there's a chance I see nothing after investing years of my life and watching them pass on a $3 billion offer. I hope that's not the case.
  - chresko 10y ago
    The company doesn't have to exit for billions in order for early employees to make a substantial return. Being employed now is a different scenario, though.
  - AndrewKemendo 10y ago
    There are other ways of making employees benefit before a liquidity event, but generally what you describe is how all this works, and has worked since the beginning. That's the risk everyone is taking.
  - downandout 10y ago
    My guess is that with such a massive round, at least some employees were allowed to take some money off the table at this valuation. I'm not sure what their policy is on secondary markets, but employees may be cashing in at the current valuation there as well. If that is the case, those that joined near the time of the $3 billion offer are likely very happy.
  - gooserock 10y ago
    Presumably though, employees also got paid a very, very healthy salary while working there too, so it's far from a complete loss...
gjolund 10y ago
This is actually really bad for employees. It is just more people that snapchat has to pay back after an exit before they pay their employees. Snapchat employees around 200 people, that works out to 9m per employee for this round.

imaginenore 10y ago

You're forgetting that the valuation of the company has been growing exponentially https://media.licdn.com/mpr/mpr/shrinknp_800_800/AAEAAQAAAAAAAAibAAAAJDA0MmU1YzZjLTE5MDctNDFlYS1iNDkxLTE0Yjg2OTZkMTE5Zg.png https://media.licdn.com/mpr/mpr/shrinknp_800_800/AAEAAQAAAAA... With this latest round it exceeds $20 billion.

cassieramen 10y ago
This is part of what I'm asking. The valuation is growing, as is the amount of money their taking. That means the company now has to exit for that much more in order for employees to see any return. If I'm an early employee I now have to hope they exit for $X billion for my shares to be worth anything. If they exit for less there's a chance I see nothing after investing years of my life and watching them pass on a $3 billion offer. I hope that's not the case.
- chresko 10y ago
  The company doesn't have to exit for billions in order for early employees to make a substantial return. Being employed now is a different scenario, though.
- AndrewKemendo 10y ago
  There are other ways of making employees benefit before a liquidity event, but generally what you describe is how all this works, and has worked since the beginning. That's the risk everyone is taking.
- downandout 10y ago
  My guess is that with such a massive round, at least some employees were allowed to take some money off the table at this valuation. I'm not sure what their policy is on secondary markets, but employees may be cashing in at the current valuation there as well. If that is the case, those that joined near the time of the $3 billion offer are likely very happy.
- gooserock 10y ago
  Presumably though, employees also got paid a very, very healthy salary while working there too, so it's far from a complete loss...

gjolund 10y ago

This is actually really bad for employees. It is just more people that snapchat has to pay back after an exit before they pay their employees. Snapchat employees around 200 people, that works out to 9m per employee for this round.