How Instagram’s TikTok Envy Finally BackfiredRead More

Private Tech Database
Media/Telecom

What Tech Employees Are Last To Know

News broke this week that Hudson Bay was closing in on a deal to buy Gilt Groupe for $250 million, a 75% drop from the $1 billion value put on the company a few years ago. But for common shareholders, such a deal would turn out to be an even bigger loss than that price implies.

One common stockholder estimated they would receive roughly $2 to $3 a share from the reported deal, approximately 90% lower than what the shares were worth in 2011. That’s because the most recent investor, General Atlantic, received liquidation preference protections guaranteeing that it would receive its money back first, leaving common shareholders and prior investors to split whatever will be left if the sale goes through.

The episode is a good example of how arcane terms of an investment made by one financier can affect all other shareholders in a private tech company, including founders and employees holding common stock or options. Too often, employees holding common stock are in the dark about how these terms affect them.

So, today we’re updating our Private Tech Database to rank companies based on how friendly their financing terms are towards common shareholders.

Get access to exclusive coverage
Read deeply reported stories from the largest newsroom in tech.
Latest Articles
 
Exclusive Venture Capital Startups
Startup Workers Find Founders Cashed Out When They Couldn’t
Mural CEO Mariano Suarez-Battan (l) and Bolt co-founder Ryan Breslow (r). Photos by Mural,  Julian Buitrago. Art by Mike Sullivan
A few weeks before Ryan Breslow stepped down as CEO of commerce software startup Bolt in January, he made a deal with investors. As part of a funding round in which BlackRock and other investors bought new stock in Bolt that valued the privately held company at $11 billion, Breslow also sold $10 million worth of his own shares to existing investors who wanted to increase their stake, Breslow...
Latest Briefs
 
Tencent’s Revenue Falls as China’s Economic Slowdown Takes Toll
U.S. Department of Commerce Approves Nearly All Tech Exports to China
Apple Plans to Expand Production of Apple Watch, MacBook to Vietnam
Stay in the know
Receive a summary of the day's top tech news—distilled into one email.
Access on the go
View stories on our mobile app and tune into our weekly podcast.
Join live video Q&A’s
Deep-dive into topics like startups and autonomous vehicles with our top reporters and other executives.
Enjoy a clutter-free experience
Read without any banner ads.
Viral Patel, global head of technology investing for Blackstone Credit. Art by Clark Miller.
Exclusive Venture Capital Startups
Blackstone Plans to Back Tech Startups in $2 Billion–Plus Lending Push
Private equity giant Blackstone is gearing up to make its first major push into lending to startups and technology companies—joining a corner of the debt market that’s quickly heating up.
Art by Josh Brill
Exclusive Asia Startups
TikTok’s $4 Billion Advertising Machine Is Messy Behind the Scenes
Two years ago, social media sensation TikTok came up with a slogan to prod brands to be more authentic in their advertisements on the app: “Don’t Make Ads.
Illustration by Clark Miller
Man v. Machine AI
Can Creatives Survive the Future War Against Dall-e 2?
Earlier this year, Karen X. Cheng, a video director in San Francisco, was commissioned by a client to make an augmented reality dress for special events.
Data Point Amazon Markets
Why Amazon Is Giving Employees Record Amounts of Stock, Even as It Trims Head Count
At a moment when Amazon’s overall workforce is shrinking, the company is awarding stock to employees at a record-breaking clip to keep top talent from heading for the exits.
Art by Clark Miller
Bought and Sold Media/Telecom
Meet Axios’ New Owners: Old-Money Atlanta Billionaires Hungry for the Next Big Thing
The pitch Sebastian Thrun made to investors in 2014 was an alluring one. Thrun—former head of Google X, the company’s top-secret skunkworks—had already raised over $20 million for his buzzy online-education startup, Udacity.
Art by Clark Miller
The Big Read
‘It’s Just Bad News All the Time’: With the Tech Economy Buckling, Silicon Valley Therapists Are in High Demand
Over the last couple of months, David Mahabali has become highly skilled at lugging pillows, floor pads and blankets around the San Francisco Bay Area.