A state filing in Alaska by Square, the San Francisco-based mobile-payments startup, has given us a rare look at a private company’s ownership.Square first reported its ownership to Alaska in 2011. But it just filed a biennial report updating those figures.
The most stunning revelation: Square CEO and cofounder Jack Dorsey now owns 32 per cent of the company. In 2011, Square said he owned 28.3 per cent.
Square did not provide updated figures for all of its major shareholders. Most venture-capital investors have protective clauses allowing them to reinvest to maintain their proportional stakes. We’re assuming those percentage stakes remained the same.
We also assumed that Square is worth $3.25 billion, the valuation assigned it in most recent financing. In a sale or an IPO, investors and founders’ stakes might change based on terms that give shareholders additional shares.
Square declined to comment for this story.
Wagner, Square's general counsel and the company's corporate secretary, joined in 2011 from Google, a company known for its generous stock awards. He owns 0.16 per cent of the company.
In a good sign for what she can do for Square, Friar, the company's CFO and acting COO, negotiated a good deal for herself. The Goldman veteran, who had a brief stint at Salesforce.com, has only been at the company for eight months, but held a 0.22 per cent stake in February. (Her stake was disclosed because she is the company's corporate treasurer.)
Starbucks invested $25 million in Square's Series D round last year, as well as striking a deal to let people buy coffee with Square in its thousands of U.S. stores. CEO Howard Schultz joined Square's board.
Visa invested in Square's Series B round alongside JP Morgan Chase and Sequoia. After subtracting JP Morgan's and Sequoia's stakes, Visa would have been able to take about 1 per cent of the company.
Rabois, Square's former COO, joined the company in 2010. He left last month in the wake of an allegation of sexual harassment, which he and Square have denied. Khosla Ventures, a major backer of Square, just brought him on as a partner. He owned 2 per cent of the company according to a February filing.
Citi's venture-capital arm and Rizvi Traverse Management participated in Square's $200 million Series D round. Starbucks also invested $25 million in that round. Assuming existing investors put in approximately $75 million to maintain their stakes, that would leave $100 million for Square's newest investors.
We don't know Kleiner's exact stake. But we know that it must be less than 5 per cent, because otherwise Alaska would have required Square to disclose it. Kleiner led a round to invest $100 million at a $1.6 billion valuation in 2011; the maths works out that after allowing earlier investors to reinvest to maintain their stakes, Kleiner would be able to take about a 4 per cent stake. It did get a board seat, held by partner Mary Meeker.
Former PayPal CFO Roelof Botha is now on Square's board of directors. The venture-capital firm had a 5.05 per cent stake in 2011.
JP Morgan invested in Square's Series B round. In 2011, it held a 5.05 per cent stake for which it had originally paid $12 million.
The Square cofounder, a glass-blowing artist, owned 9.97 per cent in 2011. He has a patent on the iconic credit-card reader. Lately, he's been investing in startups.
Khosla Ventures was Square's first institutional investor. It held an 18.35 per cent stake in Square in 2011. Vinod Khosla replaced Gideon Yu, the former Facebook CFO who led the firm's original investment in Square, as a board member in 2011.
Khosla Ventures recently gave up its right to name a board member, but Khosla has retained his seat on the board.
The CEO and cofounder now owns 32 per cent, according to a February 2013 filing.