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Stripe sets one-year timetable to decide on going public

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Re: Stripe sets one-year timetable to decide on going public

#111

Post by yieldcrv »

chimeracoder wrote: post #110
yieldcrv wrote: post #106

Earlier quoted context omitted.

but at least in an IPO the company would get a financing round, and the banks get to manipulate the market with a stabilizing bid indefinitely direct listings completely rely on retail buyers for liquidity, and even in the frothiest markets that's not enough money in the face of all employees and the company dumping shares immediately

> direct listings completely rely on retail buyers for liquidity, and even in the frothiest markets that's not enough money in the face of all employees and the company dumping shares immediately IPOs typically have a lockup period, which means that employees will always be selling to retail buyers, whether on Day 1 with a direct listing or Day 90/180/etc. when the IPO lockup expires.

for confidence games, an IPO is much better.

Re: Stripe sets one-year timetable to decide on going public

#112

Post by TimPC »

It’s honestly perplexing that so many tech companies have stayed private for such a long period of time. Especially in an era of rising interest rates and rising mortgage costs, people really want to be able to sell their stock. The difference between packages with equity you can sell and equity you can’t sell is gargantuan and there are massive benefits to having a public price that lets people fairly value that equity. Hoping to get fair value in a private market transaction is far from ideal and many employees will feel they are being forced to pay an unfair premium for liquidity.

Re: Stripe sets one-year timetable to decide on going public

#113

Post by chimeracoder »

yieldcrv wrote: post #111
chimeracoder wrote: post #110

Earlier quoted context omitted.

> direct listings completely rely on retail buyers for liquidity, and even in the frothiest markets that's not enough money in the face of all employees and the company dumping shares immediately IPOs typically have a lockup period, which means that employees will always be selling to retail buyers, whether on Day 1 with a direct listing or Day 90/180/etc. when the IPO lockup expires.

for confidence games, an IPO is much better.

> for confidence games, an IPO is much better.

Better for whom? And how?

It's not clear to me that it makes a difference for employees either way. It's not like the stock price on Day 90-180 are still thinking about what mechanism the company used to go public 3-6 months ago. At that point the stock price is mostly based on the two new 10-Qs that have been filed since then, plus additional current information like market conditions, etc.

Re: Stripe sets one-year timetable to decide on going public

#114

Post by jonas21 »

chimeracoder wrote: post #73
calr wrote: post #65

Earlier quoted context omitted.

Noob question that I am sure is answered many times. What are the catalysts for a private company switching from options to RSUs (double trigger). In my previous role I got RSUs (double trigger), but now at a much smaller startup I have an option package. As an employee RSUs are a bit easier to make sense of, but both are equity instruments at the end of the day. When, and why does that transition happen? Edit this i…

> What are the catalysts for a private company switching from options to RSUs (double trigger). For employees at very early companies that are going the venture route, ISOs are a no-brainer. The company is small enough that the strike price isn't too onerous, the company is too small to hit up against the IRS limits, and they provide pretty good tax treatment under the assumption that the company will grow massively…

> except in the case where the RSUs expire, which makes the company look bad

The benefit of double-trigger RSUs over single-trigger RSUs is that they're not taxed until after a liquidity event (IPO, acquisition, etc). That's nice for the employee as they don't have to come up with extra cash to pay taxes on the RSUs as they vest but before they can sell them.

However, double-trigger RSUs have to expire within 7 years -- otherwise there's not a "substantial risk of forfeiture" and they'll be taxed immediately upon satisfying the time condition, just like single-trigger RSUs [1]. It makes sense -- there's no practical difference between a double-trigger RSU that never expires and an illiquid single-trigger RSU, so it would be a tax loophole to treat them differently.

[1] https://drsfp.com/insights/pre-ipo-rsus-single-trigger-vs-do...

Re: Stripe sets one-year timetable to decide on going public

#115

Post by alephnerd »

TimPC wrote: post #112

It’s honestly perplexing that so many tech companies have stayed private for such a long period of time. Especially in an era of rising interest rates and rising mortgage costs, people really want to be able to sell their stock. The difference between packages with equity you can sell and equity you can’t sell is gargantuan and there are massive benefits to having a public price that lets people fairly value that equ…

Why go public when until 9-12 months ago you could raise IPO level cash ($100-300mil) in a Series D/E/F/G and with none of the SEC scrutiny. It's better for founders to remain private as long as possible. It's better for employees for companies to go public as soon as possible. For VCs it depends on what stage they are at in capital allocation (companies funded in the earlier stage of a fund will have more leeway cuz VCs don't need to pay back their investors, but companies funded at a later stage will be pushed to exit faster cuz you gotta make the investors whole)

The Collision brothers and the Hindawis (Tanium founders) have both been very vocal about this point.

Re: Stripe sets one-year timetable to decide on going public

#116

Post by rbliss »

timerol wrote: post #9
TekMol wrote: post #7

It's interesting that there is so much technology and third party business involved in the process of moving value. - Visa has a market cap of $463B - Mastercard $362B - PayPal $90B - Block $48B Could it theoretically all be automated?

No. (Channels patio11) As a society we have decided to delegate a bunch of responsibilities to the companies that move money. The most notable one is fraud protection. The companies that make this much money do so by pretending that a transfer of money is a clean, simple, and absolute thing. In reality it is messy, reversible, and fraud-prone. Being able to transfer $1B dollars as easily as you are able to transfer $…

That was a pretty good patio11!

Re: Stripe sets one-year timetable to decide on going public

#118

Post by Arainach »

TimPC wrote: post #112

It’s honestly perplexing that so many tech companies have stayed private for such a long period of time. Especially in an era of rising interest rates and rising mortgage costs, people really want to be able to sell their stock. The difference between packages with equity you can sell and equity you can’t sell is gargantuan and there are massive benefits to having a public price that lets people fairly value that equ…

After the last 6 months (to say nothing of the last few centuries of capitalism) you still believe companies care about what employees want?

Executives/Founders get loans against their illiquid but enormous equity, everyone else can go to hell as far as the decision makers are concerned.

Re: Stripe sets one-year timetable to decide on going public

#119

Post by ericd »

TekMol wrote: post #14
timerol wrote: post #9

Earlier quoted context omitted.

No. (Channels patio11) As a society we have decided to delegate a bunch of responsibilities to the companies that move money. The most notable one is fraud protection. The companies that make this much money do so by pretending that a transfer of money is a clean, simple, and absolute thing. In reality it is messy, reversible, and fraud-prone. Being able to transfer $1B dollars as easily as you are able to transfer $…

I have been paying and being paid for decades now, and I have never involved a payment processor in a dispute I had with the other side. If arbitration is the reason these companies exists, it seems like bad deal. Maybe they sell an illusion?

You might be surprised how often those disputes are used (and abused), then.
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