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For me the saddest thing is that even if Lyft stock tanks after the IPO the founders Zimmer and Green will have very little impact to their personal finances.

For me the saddest thing is that even if Lyft stock tanks after the IPO the founders Zimmer and Green will have very little impact to their personal finances. The founders along with the investors will be able to move most of their stock through the markets making them billionaires. It's mostly the Lyft employees stuck in the post IPO lock up period who will be hurt by the dip in stock value. Another reason why the rich keep getting richer.

puranjay 8y ago
Isn't the founders' holding severely diluted? They've gone through, iirc, over a dozen rounds of funding and own very little in the company
- Sohcahtoa82 8y ago
  Even owning 1% of a $15B company still makes you worth $150 million. Dumping even 2% of that $150M would give you enough to retire.
  - draw_down 8y ago
    Yeah. A billion here, a billion there, pretty soon you're talking about real money.
  - ztratar 8y ago
    3M is not even close to enough for retirement in Silicon Valley. Also... 1.6M after taxes.
    - Kye 8y ago
      I thought the usual track was Move to SV -> Get rich -> Retire somewhere cheaper. ~1 million is plenty almost anywhere on the planet. Especially if they go the FIRE route.
      - opportune 8y ago
        yeah some guy who just sold a multi-billion dollar company is going to retire with a $40k/year withdrawal rate? lmao
      - puranjay 8y ago
        $1M isn't plenty for everywhere. Even in India, $400-500k is what you would need to buy a new 3-4 bedroom apart in a good area of, say, New Delhi. In Mumbai, $1M is the bare minimum
    - mattbreeden 8y ago
      Would they not get long term capital gains rates?
    - vkou 8y ago
      You don't have to retire in the Valley. Why would you want to retire in the Valley? Everything there optimizes for bilking outrageous sums of money from overworked young people who are getting paid said outrageous sums of money. Actually, I could think of dozens of places I'd rather retire in, over the Valley.
- adventured 8y ago
  The two founders will each own between 3% and 4% of Lyft after the IPO (so $600m to $800m at a $20b market cap). Recode pegged the number at a combined ~7%. Even in a bad scenario in which the Lyft stock dumps in the 6-12 months post IPO, the founders will be very wealthy (consider that its value could collapse to $3.5b and their stakes are still worth roughly $100m each). More interestingly, despite the relatively small ownership stake they nearly majority vote control Lyft through dual-class shares with a very unusual 20 to 1 vote ratio versus the normal shares.
nostromo 8y ago
Eventually this will self correct. Snap was valued around $20b in its F round in 2016. And it's valued now around $12.5b. For a long time the public market has been viewed as the dumb money -- but for some of these companies it may actually be the late round investors that are caught standing when the music stops.
- linuxftw 8y ago
  The public market is dumb money. How many people have their 401k's allocated in 'growth stocks' of which surely lyft/snap will fall? It's almost like it's a rigged system. Someone in Wall Street gets paid off, you IPO at such and such a price, that gets you into the institutional holdings.
marcell 8y ago
Let me propose another analysis which shows this is perfectly fair. The founders created a company which delivers value by connecting over 1 million rides a day. Those riders benefit from Lyft. Additionally, riders on Uber benefit from lower prices due to competition. The IPO profits to the founders and investors are their reward for delivering this value. If you assume each ride has $1 of consumer surplus, then they are delivering over $350M a year of consumer surplus a year. As for the employees, first of all they all received base salary and benefits. They may not receive millions in the IPO, depending on when they joined, but that is the risk of working at a pre-IPO company. They all had the option to work at Google for a more predictable income.
- mattmanser 8y ago
  This sort of nonsense is why there's such a gap growing between the rich and the poor. It sounds logical, but it's in fact just another way of a few marginally deserving people taking a disproportionate amount of the proceeds of a group effort.
  - marcell 8y ago
    Really? I can’t think of a more empowered group today than software engineers. You can work at a large company and get predictable compensation. Alternately, you can work at a startup with the promise of a multi million dollar IPO. I’m each case, you can leverage multiple offers to negotiate higher compensation in equity or salary. If neither of those appeals to you, you can start your own company. There are ideas that generate predictable income comparable to a day job, or you can go for your own start up home run. If you think the Lyft founders are undeserving, then go out and start your own Lyft!

puranjay 8y ago

Isn't the founders' holding severely diluted? They've gone through, iirc, over a dozen rounds of funding and own very little in the company

Sohcahtoa82 8y ago
Even owning 1% of a $15B company still makes you worth $150 million. Dumping even 2% of that $150M would give you enough to retire.
- draw_down 8y ago
  Yeah. A billion here, a billion there, pretty soon you're talking about real money.
- ztratar 8y ago
  3M is not even close to enough for retirement in Silicon Valley. Also... 1.6M after taxes.
  - Kye 8y ago
    I thought the usual track was Move to SV -> Get rich -> Retire somewhere cheaper. ~1 million is plenty almost anywhere on the planet. Especially if they go the FIRE route.
    - opportune 8y ago
      yeah some guy who just sold a multi-billion dollar company is going to retire with a $40k/year withdrawal rate? lmao
    - puranjay 8y ago
      $1M isn't plenty for everywhere. Even in India, $400-500k is what you would need to buy a new 3-4 bedroom apart in a good area of, say, New Delhi. In Mumbai, $1M is the bare minimum
  - mattbreeden 8y ago
    Would they not get long term capital gains rates?
  - vkou 8y ago
    You don't have to retire in the Valley. Why would you want to retire in the Valley? Everything there optimizes for bilking outrageous sums of money from overworked young people who are getting paid said outrageous sums of money. Actually, I could think of dozens of places I'd rather retire in, over the Valley.
adventured 8y ago
The two founders will each own between 3% and 4% of Lyft after the IPO (so $600m to $800m at a $20b market cap). Recode pegged the number at a combined ~7%. Even in a bad scenario in which the Lyft stock dumps in the 6-12 months post IPO, the founders will be very wealthy (consider that its value could collapse to $3.5b and their stakes are still worth roughly $100m each). More interestingly, despite the relatively small ownership stake they nearly majority vote control Lyft through dual-class shares with a very unusual 20 to 1 vote ratio versus the normal shares.

nostromo 8y ago

Eventually this will self correct. Snap was valued around $20b in its F round in 2016. And it's valued now around $12.5b. For a long time the public market has been viewed as the dumb money -- but for some of these companies it may actually be the late round investors that are caught standing when the music stops.

linuxftw 8y ago
The public market is dumb money. How many people have their 401k's allocated in 'growth stocks' of which surely lyft/snap will fall? It's almost like it's a rigged system. Someone in Wall Street gets paid off, you IPO at such and such a price, that gets you into the institutional holdings.

marcell 8y ago

Let me propose another analysis which shows this is perfectly fair. The founders created a company which delivers value by connecting over 1 million rides a day. Those riders benefit from Lyft. Additionally, riders on Uber benefit from lower prices due to competition. The IPO profits to the founders and investors are their reward for delivering this value. If you assume each ride has $1 of consumer surplus, then they are delivering over $350M a year of consumer surplus a year. As for the employees, first of all they all received base salary and benefits. They may not receive millions in the IPO, depending on when they joined, but that is the risk of working at a pre-IPO company. They all had the option to work at Google for a more predictable income.

mattmanser 8y ago
This sort of nonsense is why there's such a gap growing between the rich and the poor. It sounds logical, but it's in fact just another way of a few marginally deserving people taking a disproportionate amount of the proceeds of a group effort.
- marcell 8y ago
  Really? I can’t think of a more empowered group today than software engineers. You can work at a large company and get predictable compensation. Alternately, you can work at a startup with the promise of a multi million dollar IPO. I’m each case, you can leverage multiple offers to negotiate higher compensation in equity or salary. If neither of those appeals to you, you can start your own company. There are ideas that generate predictable income comparable to a day job, or you can go for your own start up home run. If you think the Lyft founders are undeserving, then go out and start your own Lyft!