Offers from Square & Robinhood
Hey all, asking for a friend with 3YOE. He has an offer from Square and RH: Square L4: 240k TC RH L2: 300k (base = 170k, rest= paper) Please help evaluate in WLB, growth, and money. Personally Id love for him to join me at Square but I want to get the communitys take!
How much of Robinhood TC is paper money?
Base is ~170k, rest is paper
Which has better culture and wlb?
Square for sure
You can’t compare TC without breaking it down. The equity portion of Robinhood is worth less than half of what they will say it’s worth.
Updated post with RH breakdown. To expand on your comment: how would you justify discounting RH equity by half?
By the fact that they are giving you whatever their last funding round was plus some premium, whereas in reality, they are worth a LOT less now. Due to the fact that all these unicorn startups have gotten their valuations absolutely slaughtered in the last 9 months, combined with the fact that Robinhood has lost a ton of user trust and is now seen as more of a villain on Wall Street instead of the hero it used to be (encouragement of daytrading and options and high-risk gambling, not investing, and more outages in one month than the other brokerages have in 20 years). Their sole competitive advantage of “free” trading (in reality they are hiding their fees in the form of horrible price settling at the exchange level), is no longer a competitive advantage because Schwab and everyone else is free now too, with a lot better of a product. People are starting to see Robinhood for what it is: a toy for poor retail investors to lose their money. No serious investors or traders are using Robinhood, just shitloads of everyday people that have a few thousand dollars and misguided plans of getting rich quick because “anyone can do it”. Their last funding round didn’t include all of these developments (and to be frank, the fact that Robinhood has raised a ton of money from celebrities probably indicates that their valuation was ridiculous to begin with). If Robinhood were to IPO, you would be lucky if your equity retained half its value.
Ex Square: I'd go Robinhood. Unless your friend is going to cash. Alyssa is clearly running seller into the ground and cash is intentionally distancing itself from Square (own office, own recruiting pipeline, own infra, etc). Wouldn't surprise me if Cash spins off ala eBay and PayPal. And Cash is trying to monetize and take advantage of the underserved, which is clearly against the whole "help the underserved" mantra of Square. They're making money now, but it's a very fragile future that relies on tricking people who don't have money to use their shitty "rewards card".
Thanks for your perspective. I actually have the opposite view on Cash. All actions from leadership have been firmly aligned in serving our users and our mission, and I have witnessed 0 predatory product decisions. Why do you think Cash is taking advantage of users?
Cash app doesn't make money from investments; there is already some education on the investing page but it could be better. I agree the 1.5% instant deposit fee is steep, and Cash taking steps to move away from that. Users with the Cash card is able to use any ATM to withdraw money, which eliminates the need for instant deposit. Finally, I don't think profit margin is any indicator of abuse. Cash is successful because it brings value to the users. If you want an example of predatory behavior, you can look to how traditional banks operate and why Cash is so valuable to our users.
Both are good companies. your friend needs to decide based off which team they like more, what they will be working on, manager, etc.
@op what is the stock price you are getting at robinhood?
I am not sure about the price, but it would be at the valuation of their last round during covid
Robinhood is one of the few companies that's seen a massive increase in profit since Covid. Would consider that.
Square. Robinhood is building a bad reputation while Square is going to overtake PayPal one day
@Merck Here's a few bad press i've seen: 1. Outages 2. Letting 0-experience traders use high margins - There was one kid who committed suicide because his account showed a huge negative balance, which turned out to be a bug later on. 3. Their main revenue stream is a bit shady. tldr RH sells order routing to high-frequency firms.
3 is a useless point. It’s literally how every commission free company now makes money. Look it up