Stripe employees might lose millions 💸

Good morning, and welcome to our 100+ new subscribers! This is LGTM, the only newsletter that’s still written by real humans (probably).

Here's what we got for you this week: 

• DOJ prepares to kick Figma acquisition to the curb

• Stripe scrambles to raise cash

• Meta introduces paid verification 

• Everyone’s starting a startup– except you

DOJ will attempt to block Adobe’s Figma Acquisition

Adobe wants to buy its main design tool competitor but the DOJ has other designs

The Department of Justice will be pursuing antitrust action against Adobe for its planned acquisition of design tool startup Figma. Adobe’s stock fell 5% after hours yesterday when the news broke.

Figma’s beloved product with Adobe’s impossible to cancel subscriptions was a tempting combination for investors

Adobe believes the acquisition poses no antitrust concerns because design tools make up a tiny fraction of their revenue.

• Adobe initially announced its $20 billion acquisition in September which included an additional $2.3 billion retention package for key employees

• The sale price was 50x Figma’s trailing 12 month revenue, far above market valuations at the time, leading some to think Adobe was desperate and willingly overpaying to eliminate a serious competitor.

• The DOJ has been particularly hawkish lately: Attempting to unwind Google’s 2008 DoubleClick acquisition and beginning a probe of Google Maps

Stripe founders need some Irish luck right now ☘️

Collisons on collision-course with RSU expiry on the horizon

Stripe founders are raising an emergency equity round to bail out employees with soon-to-expire restricted stock units. The new equity is expected to be sold at a $55 billion valuation, $40 billion less than their last round in 2021.

Bad news for a company that was being hailed by VC’s as one of the greatest of all time.

Fact check: Google never begged investors for $4 billion in cash… and the founders weren’t 16 year old Irish guys

So... how did we get here?

Startups typically partially compensate employees with equity (aka stock) or equity options to conserve cash and align employees with the success of the business. 

But if you just straight-up give employees shares of stock, they’ll be forced to pay income taxes on the value of those shares immediately– even though the shares are private and completely illiquid. 

To avoid this, companies issue restricted stock units with an expiration date at which time they become worthless. The IRS allows the receivers of these RSU’s to delay paying taxes until a liquidation event because it meets their standards for having a “substantial risk of forfeiture.”

So Stripe has been paying its employees with RSU’s and now some of them are reaching the point of expiration (typically 7 years after issuance). While they don’t have any legal obligation to do anything about this, letting the RSUs expire would be a huge breach of trust, trigger a mass exodus and hurt their ability to attract talent. There are certainly hundreds of Stripe employees who stand to lose over $1mm dollars if the options expire.

Ready to pay money to prove you’re real? 

Meta plans to add paid verification to platforms

If you are growing tired of paying for Netflix, Hulu, Disney+, Peacock, HBO Max, Paramount+ with Showtime, Spotify, Apple Music, Tidal, Amazon Prime, and maybe even the Criterion Channel, then you’re gonna hate this. The future of social media is here, and it’s subscription-based. Meta is going to introduce a paid verification feature.

Many laughed at Elon for releasing Twitter Blue, yet a couple months later blue checkmarks are still popping up, so is it really a bad idea?

As you’d expect, there were some nerds angrily typing on Reddit: “who on earth would pay for Facebook?!” 

…probably tons of people. 

People clearly get immense enjoyment out of Facebook and Instagram. It's safe to bet tons of them would sign up for a paid service that offers something valuable to them.

Meta might actually be living up to their efficiency promise with these financial decisions. How to get more money? Start actually charging people. How to save money? Spend money only on projects that will make you money. If your goal is to make more money, then it’s a no brainer.

More to come as they roll out the initial phase of subscriptions in Australia. Eyes are on Meta to see how efficient this year will actually be.

The 2023 Startup Surge

No pressure, but everyone else is starting a company except for you. Each one of us here at LGTM has at least 3-5 other side-startups going full throttle at any given time, so that we remain virtually invulnerable to the ever-present threat of lay-offs, which don’t stop coming (almost as many layoffs already in 2023 as the entirety of 2022, according to layoffs.fyi – I’ve been sitting here blasting “Baby, You’re A Rich Man” and hitting refresh on that page since last summer).

Hurry, don’t get left out. Start a company now. Like right now. Don’t think about it. It can be about anything. Just pretend you’re the main character and start making this face all day:

And once you start your company, whatever it is, start acting terrible. Start acting weird and strange, yelling, pacing, and one day you might wake up and find they made a limited series about your behavior.

How to Sound Like a Badass At Work

The LGTM brand hinges partly on the recent Scorsese-fication of startup culture, which was undoubtedly kicked off 13 years ago now by The Social Network, the father of a thousand sorry ripoffs (Super-Pumped, Dropout, etc). I won’t speak for anyone else, but in the office I constantly try to speak and write Slack messages like Aaron Sorkin is supplying me with whip-smart, jaw-droppingly badass dialogue. I’ve compiled my top five favorites from just this week that you might want to deploy in your own work environment. 

1. “You didn’t leave a comment on my PR, which suggests that a, you did not look at it, or b, my code was perfect. Seeing as option b is impossible, due to my proven stupidity, I’ve deduced that you couldn’t be bothered to do your due diligence, and actually look over my work.”

2. “I have to miss standup today – it slipped my mind that I promised my good friend Andre I would go out to lunch with him for 3 hours in the middle of the day.”

3. “Today, I shall be moving one single solitary ticket from ‘To Do’ to ‘In Progress’ in slow motion over the course of 9 long hours.”

4. “Driving 115 mph right now on the coast, pretty loud with the wind and everything, can’t really hear you guys. I’ll type my update in the Gmeet.”

5. “Hey, you mind pushing my performance review back a few hours? Don’t really feel like doing anything right now, kinda eating chips.”

Other Noteworthy Stories

📣 Watch what you say on Reddit: Film studios that filed a copyright infringement lawsuit against a cable Internet provider are attempting to make Reddit unmask users who posted comments about piracy. The film studios want an IP registration log, name, email and address for nine users, but claim they just want to talk, and are "not seeking to retaliate economically or officially against these subscribers." So think twice before bragging about piracy or any other crime on Reddit. 

📣 Got an old iPhone?:  A factory-sealed original iPhone from 2007 was recently auctioned off for $63,356.40. We could really use that cash right now to bootstrap our 7th startup. 

📣 WallStreetBets Founder Sues Reddit: The founder and moderator of the subreddit r/WallStreetBets which kicked off the meme stock craze of 2020 is suing Reddit for allegedly banning him and violating his trademark rights. Every Redditor's dream. 

📣 Third Time's A Charm: Amazon CEO Andy Jassy desperately tries to coax work from homers to return to the office, and this time, like, for real. He didn't list a single hard stat in his letter, just vibes. 

📣 Venture fundraising hits nine-year low: Venture firms funding hit a nine-year low in the fourth quarter, mostly due to macroeconomic pressures. I know we just told you to go start a start-up, but we weren't tricking you, most of the funding has left late stage. 

That's all for this week. If you liked this weeks email, please let us know. Our writers don't get paid, your praise is all they have. Until next time 👋 LGTM