Did Stripe miss its window? Plus: VC market update, AI comes for SaaS, Trump's savvy move

The transcript opens with light chatter. One speaker asks what time it is where another is; the answer is 8:28 in the morning, with a ski outing planned for 11. The speaker says he is in Naseko, Japan, reached by a flight to Sapporo and a two-hour drive into the mountains, and describes cat-skiing at an abandoned resort left over from the financial crisis. A host jokes that he drank a Sapporo from the fridge in his honor.

The exchange ends with a mock-offended aside that this is "banter" for a friend interested in his life. A host then moves to the show, noting that there is a lot of news and that the industry has been debating RSUs and stock options. The opening is social filler, not analysis.

The first topic is the cost of employee equity and the habit of staying private too long. The host points to Airbnb and Uber, which took over ten years to go public, and says the IPO window is largely closed. In his telling, people now speculate that Stripe missed its window and faces a $4,000,000,000 tax bill linked to expiring employee RSUs. He also cites a report that Foursquare will let former employees' options expire, issued in 2016 with a seven-year window, affecting more than a hundred people, some of them early team members.

A speaker explains the mechanism as he understands it: RSUs carry an expiration date, and an RSU can only be turned into value if the company is public, so a ten-year window forces a listing. Pushing the date out by several years is, he says, a deemed event for the IRS that creates withholding obligations, which is where the $4,000,000,000 figure comes from. This is one speaker's account of tax treatment and was not checked against the rules.

On valuation, the host cites a leaked pitch deck implying Stripe needed $2,300,000,000 by the end of Q1 2023, and says it was working with Goldman Sachs to raise a few billion dollars at a $55,000,000,000 valuation, down 42% from a $95,000,000,000 peak in 2021. He wonders what the valuation would be had it gone public. Others then ask why any of this matters.

To answer the question, a host plays a 2013 interview in which Zuck speaks with Michael Arrington of TechCrunch, and a speaker describes the clip as an example of Facebook's early apprehension about going public. The reasons given include shareholder-count rules that force financial disclosure after 500 shareholders, and a belief that delaying the IPO would keep people more focused.

The speaker recalls pushing around 2010 or 2011 for a mobile operating system to compete with iOS and Android, with Intel and AT&T involved. It needed a couple of billion dollars the company lacked; going public was the only route, and Zach was not comfortable with it. A year after the IPO, he said publicly that he should have gone public sooner and that it was not nearly as bad as he had feared.

The conclusion drawn is that part of the cash later spent on AR and VR could have funded a challenge to Android and iOS, which the speaker calls an obvious bet in hindsight. He argues that many startups should return to first principles on whether waiting as long as possible makes sense. This is hindsight reasoning from one participant, not an established counterfactual.

A host says he had his team model how Stripe would be valued as a public company. His premise is that Stripe is a transparent middleman business surrounded by public companies, so a fairly accurate picture can be built from their reported data. He compares Visa, Mastercard and Adyen, calling Adyen the most obvious competitor and the outlier in profitability and operating leverage.

For listeners, the chart is explained as enterprise value to sales on one axis against 2024 estimated EBITDA margin times long-term sales growth on the other. The speaker says the $96,000,000,000 round sat at a high multiple and that the $55,000,000,000 mark is a rerating of roughly 50% to 60%. He says the more telling point is where Stripe stands relative to Adyen. The figures come from the presenter's own model.

The next chart compares gross merchandise volume per employee. The speaker says the two companies were roughly equivalent a couple of years earlier, but Stripe's headcount went from a little over 2000 to almost 8000 in about 24 months, which he describes as around three hires a day. Adyen, by his figures, grew headcount by somewhat less than 75%, and so kept its operating leverage while Stripe added a very large number of people.

His explanation is customer mix. Revenue growth is similar, but Adyen takes less per transaction because it serves large head customers with pricing power. Stripe has some of those too, such as the announced deal to process a large share of Amazon's payment volume, but such deals are not necessarily very profitable. Stripe therefore hires more people to build features for a long tail of small and medium businesses, while Adyen has fewer tail customers and fewer, cheaper employees.

His takeaway is that, with hindsight, going public in 2018 or 2019 would probably have maximized enterprise value, cleared the options problem and left a large cash balance. He doubts that the many tail products will prove profitable over the long term, noting that point products in the SaaS ecosystem compete with them. These are one host's inferences, not reported results.

Asked about Adyen's head strategy versus Stripe's tail strategy, a speaker says both are viable and refers to a blog post he wrote on enterprises versus SMBs as customers for B2B SaaS. The traditional view, he says, held enterprises to be the best customers because of large budgets, big annual contract values, strong return on sales effort and easy-to-list prospects such as the Fortune 500.

The SMB strategy has become more popular, he argues, because small companies are earlier adopters with simpler needs, with no SOC 2 compliance burden, and will buy if you solve an immediate pain point. Another speaker adds that SMB sales cycles are quick, typically one to two months, and that the low end is the most underserved, so it is good to play where incumbents are absent.

The conclusion is that it is not one or the other: some startups pursue enterprises and some SMBs, and the choice comes down to founder-market fit, with sales-strong founders leaning enterprise and product-strong founders leaning SMB. A host praises the summary and asks whether a company must eventually serve both to thrive over long periods; the question is left open in this excerpt.