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So employees get roughly 25% extra shares (RSUs, vesting in 12 month) and the C series investors get >50%? Just out of curiosity, could the employees sue (and a

by kriro 10y ago

So employees get roughly 25% extra shares (RSUs, vesting in 12 month) and the C series investors get >50%? Just out of curiosity, could the employees sue (and are they also releasing their legal claims if they accept the deal)? The same logic of fraud applies to employees. The argument would be that they were thinking the company is doing more amazing that it actually is doing and thus "wasted" time of their life working there under false assumptions. Why do they get a worse deal?

jessedhillon 10y ago
Because their losses are denominated in time and opportunity, which are more difficult to assess than money.
- driverdan 10y ago
  Their existing options are also losing half their value.
HappyTypist 10y ago
Almost. RSUs have no strike price, so it's better than options.
againstgreed 10y ago
The hard truth is it's not about the legal problem in Zenefits. Zenefits is not growing from last October. ARR remains the same 60M for last 10 months. If the company is not growing and it's burning more cash than revenue (way more in Zenefits case), the company should be valued at (cash in hand + ARR) which is 700M. No idea how Zenefits still gets 2B valuation.
- brianwawok 10y ago
  > If the company is not growing and it's burning more cash than revenue, the company should be valued at (cash in hand + ARR) Is that really true? Maybe if a company had NO HOPE of growing. Zenefits has clearly shown some huge growth. The market is huge. Just being not profitable and not growing for the short term does not mean you are guaranteed dead... just that you are default dead and need to get working on it, which they seem to be. Edit - and if truly a company was never going to grow again, I would value them at something like cash on hand + ((total rev - min expenses to stay afloat) * 3) or something... In your example if someone had ARR of 100 million, min expenses to keep doors open of 300 million, and cash on hand of 1 million.. you would value them at 101 million, I would value them at - 599 million.

by kriro 10y ago

jessedhillon 10y ago

Because their losses are denominated in time and opportunity, which are more difficult to assess than money.

driverdan 10y ago
Their existing options are also losing half their value.

HappyTypist 10y ago

Almost. RSUs have no strike price, so it's better than options.

againstgreed 10y ago

The hard truth is it's not about the legal problem in Zenefits. Zenefits is not growing from last October. ARR remains the same 60M for last 10 months. If the company is not growing and it's burning more cash than revenue (way more in Zenefits case), the company should be valued at (cash in hand + ARR) which is 700M. No idea how Zenefits still gets 2B valuation.

brianwawok 10y ago
> If the company is not growing and it's burning more cash than revenue, the company should be valued at (cash in hand + ARR) Is that really true? Maybe if a company had NO HOPE of growing. Zenefits has clearly shown some huge growth. The market is huge. Just being not profitable and not growing for the short term does not mean you are guaranteed dead... just that you are default dead and need to get working on it, which they seem to be. Edit - and if truly a company was never going to grow again, I would value them at something like cash on hand + ((total rev - min expenses to stay afloat) * 3) or something... In your example if someone had ARR of 100 million, min expenses to keep doors open of 300 million, and cash on hand of 1 million.. you would value them at 101 million, I would value them at - 599 million.