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My understanding is that Snap's financing terms have actually been very good. The 2 co-founders each still own over 20% of the company each which is pretty exce
by harryh 10y ago
My understanding is that Snap's financing terms have actually been very good. The 2 co-founders each still own over 20% of the company each which is pretty exceptional. I'm fairly certain that some of their financing even involved selling common (not preferred) stock.
A 20B+ exit (assuming that's where it ends up) is a pretty phenomenal success. That's 2 million bucks (well above your target) per basis point. A pretty huge chunk of the org in traditionally highly compensated roles (product, design engineering, and kind of management roll, etc) will do very well.
You are underestimating how big of a success this is (again assuming that the IPO goes well) for Snapchat stockholders.
- econner 10y agoThese numbers make sense to me. What I wonder though is if Snap goes the way of Twitter and winds up halving in valuation by the lockup period expiration. Is it still $1 million per basis point? Or will ratchets kick in that further dilute employees and drive the value down?
- harryh 10y agoAny unusual financing terms almost always get resolved at the time of exit/ipo. Also, again, my understanding is that Snap had very clean financing rounds so this isn't a big concern here to begin with.
- hkmurakami 10y agoAll the preferred shares convert to common at IPO so no.
- giarc 10y agoVCs and directors (14 people) own 58% of Class A, 30% for Class B, and Evan and Rob have 100% of Class C stock. I'm not sure what was in the option pool for early employees. Evan and Rob took some money off the table in earlier rounds I believe.