Base 200k RSU 150/yr TC: 350k Current TC 240 Yoe 6 Strike ~70 last valuation 240$ per share at 3b valuation in 2021. ARR may be 100-150m
Valuation multiples have compressed for all tech companies since 2021. You can use publics as a proxy even if direct competition is private. This company would have needed to grow significantly between then and now to outgrow the multiple compression, otherwise stock is likely underwater. Also ask about how big the preference overhang is.
What do you mean preference overhang
How much preferred stock there is with a liquidation preference ahead of employee stock. VCs get paid before common stockholders, including employees, so even if the stock isn’t underwater it could still be worthless.
What about TAM?
I dont know but closest competitor has 260m in ARR. biggest competitor has 2.5b in revenue
Is it a space where regulation can come into play? If you want we can discuss in detail in DMs.
Strike that RSU out of the equation. TC: 200k.
Stay at Servicenow. Paper money is of no use for next few years.
Are they RSUs or Options?
Rsu
Don’t join any series a + startups. You’ll regret or financially
Why?
Markets have changed. Yet to reflect in private companies.
100-150m arr at $3bn? Mugagagaagagagah. Cut it in half please (at best). Next is series D. Watch out for “participating” preference liquidation preference. It’s not just 1x pref stack but it may be 1.5-2x especially if founders cashed out a bit on last round. If they have venture debt on top then that’s another pref on top. Almost all A-G that raised prior to 2022 2H will have to get re-rated. We haven’t even started. T bills over last two weeks just re-rated for higher for longer >5%. It will be time to join seed -series A startup that gets funding in 2023. But for most it may be too much risk.
"3 billion valuation at 2021" Yeah forget about that valuation in 2023. I don't think you should assume you will make money, great if it does but have no expectation. Here's a simple set of questions I would ask: 1. What is the runway? 2. Breakdown of sales per quarter, follow up how many customers were lost and customer feedback 3. IPO plans Ask these questions to different people in the company and see if their answers match (or close enough). If there is a wide gap, something's fishy at the very least. From an engineering standpoint, since this is series D most of the foundational work is done and you presumably would work on incremental features. Probably more interesting than Servicenow, but not mission critical i.e. the next stage of investment is not dependant on your feature.
Agree but reality check: Problem with 3 no one really knows in this market. IPO window is closed and no one knows when it’ll open back up. My guess is not until 2H 2024 unless they’re desperate and if so, then it’s a catch-22 (you will get down majorly rounded). Even their CFO won’t know because their CFO will resort to their bankers and trust me, the bankers have no conviction whatsoever. IPO tech demand is a function of federal funds rate and appetite for risk. Latest data is not helping. Problem with 2 Real B2B contracts haven’t been terminated or downsized yet. Most are longer cycles and seat sub costs / up-sells will be majorly re-negotiated in 2023 especially if clients are non-enterprise.
@DaHotSauce my point was asking these questions to multiple people within the company. If their answers vary and not consistent, then the Op would know something's off. In my opinion, getting consistent information from multiple sources would give me confidence that the company management knowe what they're doing.
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What has happened to publicly traded equities in that same industry since this company’s 2021 valuation? May give some weak signal as to whether that’s plausible still.
Competition are all private. Closest competitor was acquired at 2.7b