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Comment by acjacobson | Hacker News Reader

That's what this round is for - to allow employees to sell some of their shares.

At what price? Certainly not a market price. A contrived price in a private sale is usually going to screw the seller.

As opposed to holding a bunch of illiquid Monopoly money?

I work for a public company. I sell all of my RSUs and diversify when I vest. I wouldn’t use 30% of my cash compensation to buy my company’s stock, why would I hold on to 30% of my compensation in company stop?

If you haven’t checked lately, the public markets don’t exactly have the stomach for money losing companies.

The problem is that when you sell shares denominated in monopoly money (e.g. shares in a private company) you have no idea if you get a fair price. There is no market to provide the signals.

I would rather take my chances and not hold on to it. I know eventually the stock in the company i work for will go up. But I would much rather be diversified

they weren't going to be able to hold; they were at the 10 year expiration.

What's Stripe's incentive to do this? Is it just to keep employees happy?

Employee options have a 10 year limit, and given the age of the company some employees were going to lose their options if they don't exercise. But to exercise you need to pay, in cash, the strike price plus taxes. I believe this founding round is to cover this.

Yeah but what is the motivation for Stripe to do this? Especially when many stakeholders don’t even work there anymore.

Because if Stripe let millions of dollars in compensation expire, no one would want to work there. Also it's the right thing to do.

> Because if Stripe let millions of dollars in compensation expire

I suppose they're still paying salaries, people will still want to work there. Maybe not the people who now only target the high comps provided by share options and related stuff, that's true.

ISOs may have a 10 year limit, but that's only for their ISO tax treatment status... they don't (necessarily) need to expire. They can convert to NSO by way of an extension. https://www.esofund.com/blog/nso-extension

Humans made the decision. Some humans like doing what they think is the right thing, otherwise they feel terrible. Feeling like a good human and not a bad one drives a decent amount of decision making.

I would err on the side that this benefits Stripe somehow. Corporate entities don't "do the right thing because it's the right thing to do". They do the right thing because it's strategically advantageous to them.

Cynically, if they let the RSUs expire it would make it hard to hire people at competitive rates relative to FAANG compensation because the RSUs promised would have been shown to be worth zero, and the total promised compensation would then also have to have any equity marked down to zero.

I know there are bad corporations out there but if you work for a corporation that "don't do the right thing because it's the right thing to do", I'm sorry. Sounds abusive. It sucks to have been treated so poorly that you're that suspicious that doing the right thing has to have some ulterior motive and it can't just be because it's the right thing to do.

Your first sentence is likely the conversation that was had. The only thing I'm suspicious of is people claiming corporate benevolence, which is the way I read danielmarkbuce's comments. Corporations, for better or for worse, will always bias towards pragmatism. When you have distributed and varying levels of complicated power that's just how things shake out. There's no soul or real culture at the center of a corporation.

The cofounders also care about their reputation very much

Their reputation has literally had monetary impact on Stripe by bringing in talent more easily because people “like” the cofounders, and it also has turned the company into the default payment platform for many startups.

I wouldn’t be surprised if they had a professional PR consultancy for boosting their individual images

Retaining that rep and goodwill is probably literally considered worth a couple billion to Stripe

Also, Stripe isn’t spending any money on this.

It’s instead become an opportunity for investors to buy lots of Stripe equity (which the cofounders are usually very stingy with—see the percentage of the company they sold during past rounds) at potentially very cheap prices since the sellers don’t get to set the price!

Stripe’s incentive to keep the price high is that it becomes the price point that employees would expect future stock vests to be awarded at. Not sure how strong an incentive that is exactly though

Humans run companies, humans made this decision.

Whether a human made it is pretty arbitrary. Someone came up with a strategy and multiple levels of Stripe decision making thought it was doable and a good idea. Executives, more often than not, will put share holders and company interest first.

In this case they didn't. In this case they had more control to make the decision they wanted too, since they control it.

That's not how a large company like Stripe works, even if you have majority shares. You still need coalitions.

Coalition of 2 in this case

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