161–170 of 235 posts
Actually 28% is nothing. Most Fintech stocks are down ~75%, this company is still wildly overvalued
Stripe did $12B in revenue last year. If the valuation of $95B dropped 28%, that is $68B. That seems like a fair, if not quite low valuation of a fast growing SaaS fintech company with an excellent product.
Remember that Stripe changed its RSU grant structure a year or so ago, so this won’t negatively affect newer employees. Stripe gives out a fixed amount of $$ value of stock each year now. The typical recent senior hire will get around $200k a year in stock. Now that the valuation is lower, they’ll be granted more stock units than before, which is good. Getting granted fewer stock units at a ‘fake’ higher valuation wo…
If I were conducting this valuation, I haven't done this myself, but I most definitely read our 409A valuations closely. I'd imagine that the outside firm hired to conduct the analysis on Fintech would use data like:
BLOCK (down 49% in last 6 months)
PAYPAL (down 60% in last 6 months)
COINBASE (down 75% in last 6 months)
INTUIT (down 30% in last 6 months)
VISA (down 5% in last 6 months)
SHOPIFY (down 70% in last 6 months)
Everyone at these fintechs, has seen the valuation of their company drop significantly (with the exceptions of VISA in the last 6 months. It's possible that stripe's performance is closer to VISA than to SHOPIFY, but only dropping 30% is likely pretty generous given the broader market.
Anyone with options at any of these public companies is dealing with the same challenges.
Earlier quoted context omitted.
If you are accepting stock or stock options as compensation, that's generally coming in lieu of cash. Maybe you had an offer somewhere else with $30k more in salary, but you took this offer instead because the projected value of the stock made the total compensation higher. If you sell your stock after 4 years for $50k, you have taken a $70k loss relative to the other offer.
I’d love to count profits and losses relative to the best possible outcome in hindsight rather than the difference between what was spent to obtain an asset vs. what I got for it, but generally that’s not how the IRS sees things. A loss is not relative like that.
Remember that Stripe changed its RSU grant structure a year or so ago, so this won’t negatively affect newer employees. Stripe gives out a fixed amount of $$ value of stock each year now. The typical recent senior hire will get around $200k a year in stock. Now that the valuation is lower, they’ll be granted more stock units than before, which is good. Getting granted fewer stock units at a ‘fake’ higher valuation wo…
Frankly, I'd be fucking pissed off about this if I had options.
Remember that Stripe changed its RSU grant structure a year or so ago, so this won’t negatively affect newer employees. Stripe gives out a fixed amount of $$ value of stock each year now. The typical recent senior hire will get around $200k a year in stock. Now that the valuation is lower, they’ll be granted more stock units than before, which is good. Getting granted fewer stock units at a ‘fake’ higher valuation wo…
RSUs are worth less than transferable stock. You can’t get liquidity for an RSU (or nontransferable stock) without using a forward, which may be illegal if you have less than a $10mm net worth. Options yield stock, however, which can be sold.
For Stripe’s VCs, on the other hand, employees accepting RSUs makes their stock special. That increases the value of their shares.
Remember that Stripe changed its RSU grant structure a year or so ago, so this won’t negatively affect newer employees. Stripe gives out a fixed amount of $$ value of stock each year now. The typical recent senior hire will get around $200k a year in stock. Now that the valuation is lower, they’ll be granted more stock units than before, which is good. Getting granted fewer stock units at a ‘fake’ higher valuation wo…
isn't that $200k/year in stock worthless anyways?
For some shares, there is a private market, and typically the company has to approve of sales. If they do, and the market has willing buyers, no problem. If the company blocks every sale, it's worthless.
Earlier quoted context omitted.
Many companies actually prohibit employees from selling shares to third party investors (including investors on marketplaces like EquityZen) without board approval.
This is a really fair and important point - I appreciate you bringing it up. I've seen a couple of Stripe secondaries before so I assume that some set of employees are able to transact on the secondary market. However, important disclaimer that not all companies have the same terms - and the terms can change depending on when you were hired. Startup equity isn't absurdly complicated, but it very much is situation-spe…
Earlier quoted context omitted.
If they believe in their valuation why shouldn't they just IPO? Is it really gonna matter if they IPO at 100B or just 60b? And if they are in fact a 100B company then supposedly at some point the public market should price them "correctly".
> Is it really gonna matter if they IPO at 100B or just 60b? Let’s ask all the employees who have been told they have $1mm in stock only to find out they in fact have $600k, etc.
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That’s a good question. People in tech all know Stripe, but outside this circle, PayPal and even Square have far superior brand recognition. If you ask my family members what Stripe is, they would shrug.
I suppose you're technically correct (the best kind of correct ;) but I am not so sure that the brand-recognition metric is the best one to apply to Stripe. PayPal and Square both have a strong B2C presence. PayPal has B2C offerings focused around sending/receiving money. Square, while they don't have a strong B2C product, does spend a lot of time sticking their logo in your face every time you go to a merchant that…
Remember that Stripe changed its RSU grant structure a year or so ago, so this won’t negatively affect newer employees. Stripe gives out a fixed amount of $$ value of stock each year now. The typical recent senior hire will get around $200k a year in stock. Now that the valuation is lower, they’ll be granted more stock units than before, which is good. Getting granted fewer stock units at a ‘fake’ higher valuation wo…
> Stripe changed its RSU grant structure RSUs are worth less than transferable stock. You can’t get liquidity for an RSU (or nontransferable stock) without using a forward, which may be illegal if you have less than a $10mm net worth. Options yield stock, however, which can be sold. For Stripe’s VCs, on the other hand, employees accepting RSUs makes their stock special. That increases the value of their shares.