Stripe

The tech news of the week has been centered around Stripe. It all begun when they sent out an email saying they were looking to go public or organize liquidity for all in the coming year.

This was of course not news to anyone that follows Stripe closely. It’s been fairly public knowledge that many are coming up on the 10 year expiration of their equity grants and the company would need to take some sort of action. This is not unusual with companies like Airbnb and Palantir notably running into the same thing in the last couple of years.

The bigger news hit last night with Stripe reportedly raising $3B at a much reduced valuation. I haven’t had a chance to do much reading about this, but it’s reportedly to pay the tax bills that they are required to withhold on.

The media has seemed to focus a lot on the downround of the company. My personal take is that this is great leadership by Stripe to just take one on the chin and just keep moving forward. The reality is that no one can control the market and great companies will have to ride the highs and the lows of the market.

Stripe seems to be sticking to a plan and ignoring the market forces involved here. Of course, that does come with backlash as they were likely ready to go public many years ago. Hindsight is 20/20 but a lot of employees would’ve been much wealthier if they had done so.

On the flip side, we don’t know where Stripe will be in the next few years. There’s a good chance that the company will be in a much better position in the long-term because of the route they took. We’ll have to see where this ends up - but I think a lot of other companies need to follow suit sooner or later and come to terms with the new reality of their lower valuations.