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I feel bad for employees that have waited a decade to cash out. No reason why Stripe couldn’t have gone public in 2020-2021 at a huge valuation but from past i
by tempsy 4y ago
I feel bad for employees that have waited a decade to cash out.
No reason why Stripe couldn’t have gone public in 2020-2021 at a huge valuation but from past interviews it sounds like the decision to remain private was just a founder preference thing because “focus” or something. Now the IPO market is completely frozen and its valuation is likely cut in half from peak, at least.
- mritchie712 4y agoThere's a healthy secondary market for companies like Stripe. Employees there can sell a good amount of their stock already (and have likely been able to for years).
- tempsy 4y agoPretty sure the company doesn’t let most employees sell. I have never seen Stripe shares offered on Forge or EquityZen.
- ohmanjjj 4y agoThey couldn’t IPO. Stripe is a bubble. They don’t want their financials under a microscope.
- topicseed 4y agoWhat leads you to believe they're a bubble?
- paganel 4y agoGenuine question, what’s the real value proposition of Stripe? They do have a slick integration process for outside developers, but is that enough for to justify the financial values attached to them in the recent past?
- celestialcheese 4y agoAs one of the earliest stripe customers, yes, that was the reason why we switched to them from Authorize.net. Developer docs and easy API integration was, and is still, their "stickyness". But the eco-system of new products they've added have grown that moat to make it easy and cost-efficient to offload more and more of the financial and subscription stack onto Stripe. It's a virtuous cycle
- nytesky 4y agoIs Stripe profitable? I heard some of its financing is from PE and bank funding, which tend to be less tolerant of money losing or low profit operations. If they are not profitable they will need more capital eventually or to lengthen their runway.
- sdrinf 4y agoThe second they go public it triggers a 6-12 months window after which all of their employees can cash out. This will, inexorably lead to an exodus of their most senior peeps, and when it happens, will probably be ground zero for the next gen of fintech startups. Delaying going IPO this way, amongst other things, is about retention.
- tempsy 4y agoI don’t think this is correct. Then your theory is that every tech company that went public in last 2 years have experienced a brain drain that Stripe has not. Lock up periods aren’t set in stone. They probably didn’t need to raise money and could have done a direct listing and let employees cash out immediately.
- nscalf 4y agoThere’s also no lack of buyers for stripe on secondary markets.
- tempsy 4y agowhether you can sell on secondary markets is restricted by the company. pretty sure Stripe has not let most employees sell on secondary markets. personally have not seen them solicited on Forge or EquityZen myself.
- deleted 4y ago[deleted]
- throw3823423 4y agoFor anyone that has been there anywhere near a decade, there's been opportunities to cash out partially, at very good valuations. You'll see that a vast majority of early employees have departed, and they didn't do that by giving away their early options, or getting crushed by AMT by exercising without liquidity. While it might have been nicer to IPO by now, early employees are doing extremely well.
- tempsy 4y agosure that’s true of most unicorns. early employees are a tiny fraction of the workforce waiting to cash out.
- mywittyname 4y agoHow generous were these cashouts? I've seen order of $1MM caps on early cashouts, but I have no idea if that's the norm or not.
- brentm 4y agoThe trend of companies taking huge late stage rounds was always going to blow up the public tech IPO market. Many companies get too used to free money and operating with little inspection. By the time they feel like they "have to go public" the growth rate has peaked and they haven't learned to operate with any level of financial scrutiny. Result is private market investors do great and all too frequently public markets bomb in 6-12 months or sooner.
- umeshunni 4y agoYup! This has been the trend for the last 10 years. Facebook was probably the last well run company to go public, probably because it grew during the pre-Zirp era.
- no_butterscotch 4y agoAt this point in time I wonder if many people with senior level shares have found other alternatives to cash out. Secondary markets for instance.
- neivin 4y agoAnyone who has been there for a decade had options and has already cashed out. Folks who are getting screwed are the ones that joined in ~2017 when they started issuing RSUs instead of ISOs.
- melvinmelih 4y agoWhy? I always thought RSUs were better than ISOs
- thesandlord 4y agoRSUs typically expire if the company doesn't go public in X years
- e28eta 4y agoThey’re double-trigger RSUs, to avoid tax liability pre-liquidity.
- itsoktocry 4y ago>its valuation is likely cut in half from peak, at least So you wish they would have got to dump overpriced shares on the public to further enrich insiders? It's not like Stripe engineers were earning minimum wage digging ditches for 10 years...