Did Uber’s down round wipe out employee equity ?

Facebook sozsus
Dec 29, 2018 26 Comments

Slightly old news, but I just realized that Uber had a downround when it took money from SoftBank. That would have wiped out a lot of employee equity. What do folks at Uber think of this ? Also, who was able to sell in that round.

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TOP 26 Comments
  • Uber fFgE67
    Yes, only secondary shares were sold so no dilution took place. It was a nice liquidity event for early employees who had options.

    We have a 409a price which has always been lower than the publicly quoted valuation which is the preferred price - upon ipo the two is supposed to converge. The “downround” to SoftBank was closer to the 409a price. It did mean that people who got offers at that time got more stock though - because it was harder to hire due to negative PR etc, and recruiters tend to quote the last fundraising valuation because 409a is not public information.
    Dec 30, 2018 11
    • Uber fFgE67
      No recruiters don’t quote 409 price. If they did it would be better for you and you wouldn’t get a shock after you join??
      Dec 30, 2018
    • Uber foRa27
      What is nbccyjesfp talking about...?
      Like what fFgE67 said, you would not get any shock if the recruiters use 409 price.
      Dec 30, 2018
    • Uber / Eng random333
      My recruiter mentioned 409a, and calculated how Uber is evaluated to this figure.
      Dec 30, 2018
    • I may have misspoke a little. Out preferred price was way higher than the market price. So the total rsus you got was 30-40% lower than what you got had you been quoted the market value.

      Post the downround they started quoting the actual market value , hece the new employees got 30-40 % more rsus for the same monetary value .
      Dec 30, 2018
    • My denominator to calculate total rsus was the preferred value and not actual market value ( value offered / price per rsu). My recruiter"forgot" to mention that. So my rsus are as if the company was 85-90 billion. So yay
      Dec 30, 2018
    • Uber fFgE67
      But Uber was never valued at 85-90 billion. The highest is 70 billion...
      Dec 30, 2018
    • Uber fFgE67
      Also 409a is not “market value”. There is no market value because the company is not public. Also upon ipo the 409a value and the preferred value should converge.
      Dec 30, 2018
    • Yes uber was never 85-90 but the preferred price was at that level. The prices would converge only if Uber IPOs above 85-90.

      So if it IPOs at say 120 , your colleagues with double their stock value while you may make 40% .
      Dec 30, 2018
    • Uber fFgE67
      I don’t think the 409a or preferred was ever at that value.
      Dec 30, 2018
    • Uber gsfhdvv
      You knew Toyota valuation, you know 409.

      Back of the envelope calculation for valuation using preferred would be aroundv that

      70*preferred value/409 = value of company at which actual value=preferred
      Jan 2
  • New / Eng
    julop

    New Eng

    BIO
    Eng at Hyper Anna
    julopmore
    Not so much "wiping out" but certainly adding even more dilute to the mix. Uber has given out so many shares through investment that when they do their IPO the huge dump into the market could make the share price collapse.
    Dec 30, 2018 2
    • Google euBx84
      How is it dilution lol, they bought employee/investor shares. There should be no dilution, but valuation of company decreased. No new shares were issued.
      Dec 30, 2018
    • Uber / Eng iSlz16
      SoftBank also invested a billion in Uber so there was some dilution iirc
      Jan 2
  • Cruise Automation newstar
    Why would it wipe out? I thought that it was all buyout from current investors and employees who had options. Not that new shares were issued.
    Dec 30, 2018 0
  • Uber NgAtsh
    Actually it gave many pre-2015 employees opportunities to cash out at a not bad price. Many of them got a house with that ...
    Dec 30, 2018 1
    • Uber / Eng nYf6sJ
      And they found out them selves idiots just a few months later.
      Jan 1
  • You wouldn't get "wiped out", you may lose some percentage and that's it, right?
    Dec 30, 2018 1
    • New DvVM00
      you can get wiped out with options
      Dec 31, 2018
  • New / Eng MSFTE
    Who cares about those fuckers
    Dec 30, 2018 0
  • For the ones joined before 2014, it was a nice cash out event.
    Dec 30, 2018 2
    • LinkedIn xkcd1
      Explain how did the math work out?
      Dec 30, 2018
    • Uber nickki
      Paper money converted into Trump money -> net positive
      Dec 30, 2018
  • Uber fFgE67
    The requirements iirc was that you needed to have options not RSUs and you need to have net worth over $1 million
    Dec 30, 2018 0
  • LinkedIn Weiner
    :yawn:
    Dec 30, 2018 0

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