6 ms·

The company is 12 years old, the biggest player in their domain (online payments) and still needs that much funding? Where is it time to turn the knobs and star

The company is 12 years old, the biggest player in their domain (online payments) and still needs that much funding? Where is it time to turn the knobs and start producing income?

kansface 4y ago
> The funds raised will be used to provide liquidity to current and former employees and address employee withholding tax obligations related to equity awards, resulting in the retirement of Stripe shares that will offset the issuance of new shares to Series I investors. Stripe does not need this capital to run its business.
bootsmann 4y ago
> The funds raised will be used to provide liquidity to current and former employees and address employee withholding tax obligations related to equity awards, resulting in the retirement of Stripe shares that will offset the issuance of new shares to Series I investors. *Stripe does not need this capital to run its business.* It’s the second paragraph of the OP
- thgirhet 4y ago
  [flagged]
- tamade 4y ago
  That last sentence is corporate PR spin. They very much need this capital to run the business, ie, they didn't have enough money to pay taxes.
  - zaroth 4y ago
    They aren’t raising the money to pay corporate taxes. They are doing this so their employees can pay taxes on otherwise illiquid shares (i.e. taxes the employees can’t afford).
    - gmd63 4y ago
      Isn't managing employee satisfaction part of running a business?
      - zaroth 4y ago
        Everything that Stripe does is part of running their business, that’s just a tautology.
  - camjw 4y ago
    They could have just let employee options expire and then they wouldn't have had the tax bill. Though, I imagine recruitment would become a bit harder then.
  - jeremyjh 4y ago
    They didn’t have enough to pay their employee’s taxes on unrealized gains.
- HDThoreaun 4y ago
  If paying your employees in stock with no plan to IPO is how you run your business then you do in fact need capital to pay taxes on that stock in order to keep your employees.
- serial_dev 4y ago
  Well, don't they, though? The way I understand it is that if they wouldn't have this round, lots of very valuable, tenured employees would be f-ed over, which could cause them to leave on very bad terms and a PR nightmare that could make attracting workers hard.
  - zaroth 4y ago
    No, they don’t. There’s an appreciable difference between a company selling newly issues shares to fund their corporate expenses, and arranging a liquidity event for your employees. That’s what they are explaining in that paragraph. Obviously it can be very much in their interest to do this, while it is still also true that “Stripe does not need this capital to run its business.”
deleted 4y ago
[deleted]
superfrank 4y ago
If I'm understanding this correctly, this is less about raising money for the company and more about letting current employees cash out some stock. It's a roundabout way for employees to sell stock to investors with Stripe acting as a middle man.
- jonny_eh 4y ago
  Why not go public instead? Wouldn't that be cheaper?
  - xoa 4y ago
    They'd planned to IPO, but the market for that right now is very, very bad. They only have one chance to get maximum value for their IPO and it's understandable they'd want to wait. Not like being private for another few years hurts them any after the previous decade, this isn't a company going for an asap exit. However, there is the 10 year hard limit for options, so this appears to just be a maneuver to deal with these two conflicting realities.
    - elAhmo 4y ago
      This part is confusing to me. Yes, the market is bad and their IPO would probably be way less than it would’ve been if the market was “healthier”. But if the market recovers and they want to do an IPO then, wouldn’t they be in the same position if they IPOd now, and then growth of the market would cause their stock to grow as well?
      - lozenge 4y ago
        Firstly, a good or bad IPO can be remembered for years as part of the reputation of the company. Secondly, yes their stock could grow after the IPO, however the stock would be publicly owned at that point so the profit would go to the public shareholders instead of the current holders of the stock (founders, investors, employees).
        4y ago
hakfoo 4y ago
While they've got a lot of mindshare, I have to wonder if they have a particularly deep moat. I know the appeal of Stripe was that it was easy and attractive; using their embedded widgets allowed you to keep a low PCI compliance profile. But similar products are rapidly becoming table stakes in the industry. When that's no longer your secret sauce, how do they fend off when merchants scale to a point where their finance guy says "We can save money by swapping Stripe for Brand X Gateway"

The company is 12 years old, the biggest player in their domain (online payments) and still needs that much funding? Where is it time to turn the knobs and start producing income?

kansface 4y ago

> The funds raised will be used to provide liquidity to current and former employees and address employee withholding tax obligations related to equity awards, resulting in the retirement of Stripe shares that will offset the issuance of new shares to Series I investors. Stripe does not need this capital to run its business.

bootsmann 4y ago

> The funds raised will be used to provide liquidity to current and former employees and address employee withholding tax obligations related to equity awards, resulting in the retirement of Stripe shares that will offset the issuance of new shares to Series I investors. *Stripe does not need this capital to run its business.* It’s the second paragraph of the OP

thgirhet 4y ago
[flagged]
tamade 4y ago
That last sentence is corporate PR spin. They very much need this capital to run the business, ie, they didn't have enough money to pay taxes.
- zaroth 4y ago
  They aren’t raising the money to pay corporate taxes. They are doing this so their employees can pay taxes on otherwise illiquid shares (i.e. taxes the employees can’t afford).
  - gmd63 4y ago
    Isn't managing employee satisfaction part of running a business?
    - zaroth 4y ago
      Everything that Stripe does is part of running their business, that’s just a tautology.
- camjw 4y ago
  They could have just let employee options expire and then they wouldn't have had the tax bill. Though, I imagine recruitment would become a bit harder then.
- jeremyjh 4y ago
  They didn’t have enough to pay their employee’s taxes on unrealized gains.
HDThoreaun 4y ago
If paying your employees in stock with no plan to IPO is how you run your business then you do in fact need capital to pay taxes on that stock in order to keep your employees.
serial_dev 4y ago
Well, don't they, though? The way I understand it is that if they wouldn't have this round, lots of very valuable, tenured employees would be f-ed over, which could cause them to leave on very bad terms and a PR nightmare that could make attracting workers hard.
- zaroth 4y ago
  No, they don’t. There’s an appreciable difference between a company selling newly issues shares to fund their corporate expenses, and arranging a liquidity event for your employees. That’s what they are explaining in that paragraph. Obviously it can be very much in their interest to do this, while it is still also true that “Stripe does not need this capital to run its business.”

deleted 4y ago

[deleted]

superfrank 4y ago

If I'm understanding this correctly, this is less about raising money for the company and more about letting current employees cash out some stock. It's a roundabout way for employees to sell stock to investors with Stripe acting as a middle man.

jonny_eh 4y ago
Why not go public instead? Wouldn't that be cheaper?
- xoa 4y ago
  They'd planned to IPO, but the market for that right now is very, very bad. They only have one chance to get maximum value for their IPO and it's understandable they'd want to wait. Not like being private for another few years hurts them any after the previous decade, this isn't a company going for an asap exit. However, there is the 10 year hard limit for options, so this appears to just be a maneuver to deal with these two conflicting realities.
  - elAhmo 4y ago
    This part is confusing to me. Yes, the market is bad and their IPO would probably be way less than it would’ve been if the market was “healthier”. But if the market recovers and they want to do an IPO then, wouldn’t they be in the same position if they IPOd now, and then growth of the market would cause their stock to grow as well?
    - lozenge 4y ago
      Firstly, a good or bad IPO can be remembered for years as part of the reputation of the company. Secondly, yes their stock could grow after the IPO, however the stock would be publicly owned at that point so the profit would go to the public shareholders instead of the current holders of the stock (founders, investors, employees).
      - 4y ago

hakfoo 4y ago

While they've got a lot of mindshare, I have to wonder if they have a particularly deep moat. I know the appeal of Stripe was that it was easy and attractive; using their embedded widgets allowed you to keep a low PCI compliance profile. But similar products are rapidly becoming table stakes in the industry. When that's no longer your secret sauce, how do they fend off when merchants scale to a point where their finance guy says "We can save money by swapping Stripe for Brand X Gateway"