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The most interesting thing here is that this is a down round (n.b. employee liquidations should've been priced into prior valuations). Imo, if they try to IPO t
by dvt 4y ago
The most interesting thing here is that this is a down round (n.b. employee liquidations should've been priced into prior valuations). Imo, if they try to IPO this year, they're going to get wrecked. Stripe has been one of YC's most winningest startups (if not the most winningest—on paper, of course), so it's worrying to see what is potentially the beginning of the end.
- benatkin 4y agoKinda like WeWork or Uber. They'll still chug along but lose a lot of their shine. Though I still love the ambience of WeWork offices and the convenience of Uber/Lyft on occasions when I use it.
- jstummbillig 4y agoWhat is interesting about that? Amazon is down 30% yty. Why would Stripe not take a hit?
- benatkin 4y agoIt seems they're in for a lot worse than that. Could be wrong though. I still think Stripe is really thriving in terms of products, services, and customers. However, when even really good news (somebody wants to give them a whole lot of money!) is interpreted as bad news (not at as high of a valuation as before), it's hard to imagine them not having a hard time.
- dvt 4y agoRaising a down round when you're private is fundamentally different than the "market being down" when you're public ($AMZN is down due to macro factors). It means a few things: old investors are diluted which is very painful, employees are diluted which means you'll lose talent, you're most likely desperate for cash which shows cashflow/war chest problems, and finally, the IPO strike price will most likely be even lower than expected.
- jstummbillig 4y agoI don't understand. Why would a publicly and a privately traded company react fundamentally different to the economy? What macro factors are you referring to, that fundamentally influence one but not the other?
- dvt 4y ago> Why would a publicly and a privately traded company react fundamentally different to the economy? For one, selling shares in a private company is much harder (if not impossible, barring buybacks), so that's why valuations are relatively stable (and ideally only go up, until an IPO). So by definition, private equity is less volatile than the public markets. Secondly, private investments are a fairly well-studied hedge against inflation (due to return horizons being relatively low and return multipliers being relatively high) and also do well during, and immediately after, a recessionary period (where public markets generally do poorly). (But maybe I misspoke, they are both, of course, affected by macro factors, but the effects are probably much more attenuated in private markets.)
- MichaelZuo 4y agoTo add: Everyone gets extra nervous after a down-round, or so I've heard. So even trivial things become magnified and causes suspicion, tension, etc...