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Etsy IPO Form S-1
- Animats 12y agoSome of the key numbers aren't there. It's not clear how much stock the insiders retain after the IPO. At least there's only one class of stock, though. Google and Facebook have two classes of stock; the insiders hold the class with a majority of the voting rights. (That's rare; the only other big US company set up that way is Ford.)
- djloche 12y agoThe numbers at a glance: Revenue 2012 $74.6M+ 2013: $125M+ 2014: $195.5M+ Profit: Net loss 2012: (2.3M+) 2013: (0.7M+) 2014: (15.2M+) $88M cash on hand - so they can afford to run at a loss for a few years while they grow the company. I guess it makes sense to go public and raise more cash while the market is hot.
- amosson 12y agoIt looks like there Free Cash Flow in 2014 was about $4MM positive so they aren't really burning cash
- zzleeper 12y agoHow's that possible? I would expect them to be investing heavily which means low FCF even with positive profits. I also doubt they are decreasing inventory (do they even hold it?) Maybe the positive cf is just a fluke due to Xmas season? If you sell a lot before the end of the year, and only pay your sellers in Jan, and you have an exponential growth, then the positive cf may mean nothing..
- mediaman 12y agoSome growing companies have positive cash flow but negative earnings as long as they are growing. For example, they may take credit card payments from customers, but pay suppliers on terms. In which case growth causes consistent annual free cash flow higher than earnings. Amazon is a decent example of this where their earnings suck, but their FCF has been reasonable every year. I'm not sure about the particulars of how Etsy issues payment to suppliers though.
- djloche 12y agoIf you look at their expenses, a huge chunk of their 'loss' is them issuing shares to employees. They're required to count this as a cash expense. You can make the argument that they could be profitable if they stopped granting shares, but in reality, this is part of their employee compensation plan and if they stopped issuing shares, they'd likely have to incur actual cashflow costs in order to keep their employees (eg. higher salaries or cash bonuses). Amazon is in a similar situation.
- meritt 12y agoMy financial analysis skills must be weak but how does a company take a loss every year yet also have $88M in the bank?
- pyrrhotech 12y agothey raised more than 88 million in the past?
- timdorr 12y agoThey've taken $97.3M before: https://www.crunchbase.com/organization/etsy https://www.crunchbase.com/organization/etsy Presumably they had some profitable years prior to 2012 or have maintained limited losses. Either way, it looks like they're gearing up for some big growth in the next few years. They dipped into the coffers in 2014 and will raise a lot of money from this IPO, so they'll have plenty of cash to burn on fast growth. It should be interesting to watch!
- meritt 12y agoHrm, that's a bit of a red flag to me. Why bother raising so much money if you're not going to utilize it? Surely growing your business will outpace average annual investment returns. I'm sure the investors have to be annoyed they basically just transferred their assets to Etsy to sit on and not utilize. And now they're trying to raise an additional $100M via an IPO? It's not like Apple who are literally in the position of "We have so much money we don't know what to do with it."
- jonknee 12y ago> I'm sure the investors have to be annoyed they basically just transferred their assets to Etsy to sit on and not utilize. Considering they all stand to make a bundle through the IPO I'm sure the investors are collectively not-annoyed that Etsy hasn't wasted their money.
- bbcbasic 12y ago
- callmeed 12y agoHold on ... is that $195.5M in revenue their actual revenue from listing fees? Or is that the total sales revenue from all the sellers?
- egonschiele 12y agoI recently set up a shop on Etsy to sell my art. There are two types of shops for selling prints: shops that print/ship for you (like nuvango), or shops that just provide a storefront (like etsy). Of the latter, Etsy isn't the cheapest (Square Market was). But Etsy has discoverability and ratings, and that's why I chose Etsy. I think it gives them an advantage over their competition. On the other hand, you are not going to make a lot of money selling prints anywhere. This website tracks the top shops on Etsy: http://www.craftcount.com http://www.craftcount.com The top shops sell beads, clothes, jewelry. It makes sense: even as a person who makes posters, I have bought more shirts than I have bought posters in my lifetime.
- nahname 12y agoAre those sales the number of orders per shop?
- egonschiele 12y agoNumber of orders. It looks like the bead shops have a lot of orders, but they just sell small quantities for beads as each item, so you can easily buy 30 items and spend just $60.
- chrischen 12y agoHey, I've been building the type that prints and ships it for you. We don't provide discoverability, but in exchange we have extremely low prices ($22 for a 12x12" stretched canvas, no commissions or monthly fees). You can see the link in my profile (amanufactory).
- egonschiele 12y agohow much to print+ship a 11x14 watercolor piece?
- chrischen 12y ago~$10 to print and ~$6 to ship. Our paper print prices aren't finalized yet, but will be coming in less than Society6. You can also list your original watercolour piece for sale alongside the fulfilled stuff. If you're interested, request an invite and let me know your username. We'll have finalized pricing soon.
- jonknee 12y agoInteresting nugget in that they're reserving 5% of the IPO price shares for their users: > At our request, the underwriters have reserved up to 5% of the shares of common stock offered by this prospectus for sale, at the initial public offering price, to individual investors. We call this our IPO Participation Program, or IPP. The purpose of the IPP is to allow our U.S.-based Etsy community and other individual investors to participate in our IPO.
- pcl 12y agoI wonder how they plan to allocate them.
- donutreceipt 12y agohttps://etsyipo.morganstanley.com/etsy/index.html#/sps/dspForm https://etsyipo.morganstanley.com/etsy/index.html#/sps/dspFo...
- pcl 12y agoInteresting. They're capping individual participation for that 5% pool at $2,500. If Bloomberg is right that they're looking to raise around $300M, that 5% pool is $15M. That comes out to 6,000 shareholders in the pool if all the members fully allocate. I wonder how many individuals participate directly in a typical IPO process. I'd assume that this will be strictly additive, and that banks (including MS) will still do their opaque preferred-client treatment on top of the 5% pool. [1] http://www.bloomberg.com/news/articles/2015-01-14/etsy-s-ipo-valuation-may-hit-2-billion-feeding-off-of-grubhub http://www.bloomberg.com/news/articles/2015-01-14/etsy-s-ipo...
- seeingfurther 12y agoNot a single mention of any of the four founders. Sad.
- honksillet 12y agoWhat happened to the founders? Is there a back story here?
- free2rhyme214 12y agohttp://www.forbes.com/pictures/feki45gjlk/rob-kalin-usv-on-flickr-jpg/ http://www.forbes.com/pictures/feki45gjlk/rob-kalin-usv-on-f... Sad.
- colmvp 12y agoHaim Schoppik and Chris Maguire: Left Etsy at the same time (https://blog.etsy.com/en/2008/a-fond-farewell/ https://blog.etsy.com/en/2008/a-fond-farewell/) to create Postling (http://mashable.com/2009/08/11/postling/ http://mashable.com/2009/08/11/postling/) Kalin is still there as CCO. Tarbell also looks like he's still there too?
- djloche 12y agoRobert Kalin lists himself as CCO (compliance officer) on Linkedin. It looks like both Haim Schoppik and Chris Maguire are no longer with the company as of August 2008. It looks like Jared Tarbell is also no longer working at Etsy either. Seeing as the company has raised 8+ rounds, I would hope they had the sense to cash out at least some of their shares.
- skuhn 12y agoCCO in this case means Chief Creative Officer. Since he's not listed in the S-1, isn't a member of the board, and hasn't been quoted as speaking on behalf of Etsy in any articles I could find post-2011, I presume that his LinkedIn profile is just rotting away. I get the impression that he sees himself in the elder statesman phase of his career, given how he is always listed as "the founder of Etsy".
- sabalaba 12y agoPretty interesting, not a single mention of any of the founders appear on the S-1 form.
- free2rhyme214 12y agohttp://www.forbes.com/pictures/feki45gjlk/rob-kalin-usv-on-flickr-jpg/ http://www.forbes.com/pictures/feki45gjlk/rob-kalin-usv-on-f...
- ericglyman 12y ago"We eat on compostable plates, and employees sign up to deliver our compost by bike to a local farm in Red Hook, Brooklyn" - Page 93 Etsy's hipster cred is off the charts right now
- EC1 12y agoI hate that any increase in efficiency or doing good is cast aside as hipsterism, being different for the sake of being different. Why is it 'hipster', not environmental?
- DannyBee 12y ago" and employees sign up to deliver our compost by bike to a local farm in Red Hook, Brooklyn" 1. Bike is not an efficient mechanism for delivering compost (in fact, it's probably the least efficient mechanism) 2. Why does it matter that they took it to a local farm and not "the local compost heap"? IE they specifically mention both in an attempt to make it seem like that's better than "i drove compost to the dump and dropped it at the county compost pile". That's hipster.
- gaadd33 12y agoI don't think Kings County/Brooklyn has a municipal compost pile. Nor any active dumps in the city limits. Also I would guess the "local farm" bit is showing that they are supporting tiny/small businesses which is exactly their target market for sellers.
- DannyBee 12y ago1. Brooklyn has compost bins at most residences, and elsewhere (or at least it was a pilot program, i haven't visited in a year) 2. There are just amazing number of places to compost in brooklyn. The local farm bit is just there to make them feel better about themselves. That is, again, hipster. A non-hipster would just be doing it, without making it seem like it's amazing and that they are doing it in some beautiful unique snowflake way.
- dewitt 12y agoLooking at the cap table (to the extent it's visible in the S-1) it appears that the big winners are the investors: Breyer, USV, Accel, Tiger Global, and Index add up to 92.3% ownership of the company. [Edit, 65%] Or am I totally reading that wrong? (Note, I really might be, this isn't my area of expertise. I just scrolled down to "Beneficial Owner".) Edit: It was pointed out below that I double-counted Accel, making the total closer to 65%. Thanks!
- ericglyman 12y agoYou are double counting Breyer and Accel's shares -- footnotes give the key details. Breyer personally owns 3%, and is deemed to control Accel's 27%. So collectively, Breyer is considered to control 30% of voting shares. Read correctly (not adjusting for any preferred or convertible notes that could be in the structure somewhere), the amount held by Breyer, USV, Accel, Tiger Global, and Index should add up to ~65%
- dewitt 12y agoThanks! That sounds a lot more reasonable. I'll amend the original comment.
- free2rhyme214 12y agoPretty sad the founders got fired: http://www.forbes.com/pictures/feki45gjlk/rob-kalin-usv-on-flickr-jpg/ http://www.forbes.com/pictures/feki45gjlk/rob-kalin-usv-on-f...
- gaadd33 12y agoWere all of them fired or just the CEO?
- free2rhyme214 12y agoIt sounds like just the CEO
- callmeed 12y agoWhy sad? Everything I remember reading pointed to him not being a good CEO.
- free2rhyme214 12y agoOh I didn't know that.
- deleted 12y ago[deleted]