Sign up to receive 5 free days of our daily summary for tech news.

Read this article for free.

Already a subscriber? Log in here

Media

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.

What Is The Information?

Notebook b5103017ee163370a1667c9ce59ab0ef023875a17888105d26c185cadf31bb69

Daily news analysis

Every weeknight, we'll send you our reporters’ views on the day’s top tech news—distilled into one email.

Notes bb3aa5069205d702dda37fc71dc6f1c59df2310c4379304e9f1199f052af4884

Exclusive Articles

We broke it first. Receive original reporting, stories, and exclusives you won't read anywhere else from the largest newsroom in tech.

Conference calls c9e664e8b96ee347d3e92b8309938f268422b9db98cfabca5c826fbb75054b23

Conference calls

Go deep into areas like crypto and VC diversity—or get real-time analysis of breaking news—via conference calls with our reporters and other experts.

Events 499acedd16cffc41445edd76bfd302b2836c2a27419890f17130a6b10e2aa3df

Special Events

For no extra fee, subscribers get access to more than a dozen events yearly, from intimate dinners to larger gatherings with marquee speakers.

Access the best reporting on the tech industry read by tens of thousands of global executives.

Become a contributor

Share your views and find other subscribers by completing your profile. You’ll be listed in our contributor directory.

Org Charts

Access the only collection of tech company org charts. Our expanding database includes companies like Amazon, Snap, and Uber.

Slack community

Discuss topics and current events with our subscriber-only Slack group and share news about your company with other subscribers.

Share with your team

Subscribers can unlock any article and share it with friends and co-workers through a special share link.

Stay up to date on Silicon Valley

Sign up for Jessica Lessin’s (The Information’s CEO & Founder) free Saturday newsletter and also receive a complimentary week of our daily afternoon tech commentary email.

Already a subscriber? Log in here

Recent Articles

Startups

Next Target for Startups: Reinventing Bus Travel

By Cory Weinberg

Venture Capital Cities Startups

Bay Area’s High Costs Drive Away Some Tech Firms

By Cory Weinberg

Asia Venture Capital

SoftBank in Talks to Invest in Bytedance

By Yunan Zhang

Asia

For China’s Startups, New York Stock Markets Still Beat Hong Kong

By Wayne Ma