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by akamia 1205 days ago
The concern could be a brain drain. If lots of your early employees cash out and leave, you are potentially losing a lot of historical knowledge and expertise at a time when you are trying to build up to a successful IPO. Early employees often leave after an IPO. At that time, it is still disruptive but the company's priorities have changed.
2 comments
Analemma_ 1205 days ago
It's difficult to sympathize with Stripe when these options coming up on the ten-year mark, especially because we all know the reason it has been taking so long is that they would really like to just raise private capital forever instead of giving these employees their due.
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xyzzyz 1205 days ago
The employees can always exercise and quit even if they cannot sell it, this doesn’t do a lot for the brain drain. Instead, the main reason is that company wants to control who its shareholders are. They don’t want just any entity to be able to become a shareholder and by this virtue, acquire extra privileges and access.
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oblio 1204 days ago
> Instead, the main reason is that company wants to control who its shareholders are.

Why?

> They don’t want just any entity to be able to become a shareholder and by this virtue, acquire extra privileges and access.

They're early employees, why wouldn't they be rewarded? What makes a random person that just walked in with a wad of cash more deserving?

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xyzzyz 1204 days ago
For the same reason why you might want to borrow money from one person, but not from another: people typically want to choose to whom they are responsible. You don’t want to suddenly acquire an activist minority shareholder, who’ll sue you for alleged breaking of your fiduciary duty to him, and distract you or force you to change your plans.

> They're early employees, why wouldn't they be rewarded? What makes a random person that just walked in with a wad of cash more deserving?

Not sure what you mean. The entire point is that people who run private companies often do not want random people/organizations to come in with a wad of cash and become shareholders, without people running the company having any say in it.

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