Here’s who gets rich when Airbnb goes public

Brian Chesky Airbnb

Summary List Placement

Airbnb has dropped the paperwork for its initial public offering, and it’s ripe with juicy details that a startup doesn’t have to disclose but a public company does, such as which investors own the largest stakes.

As is typical these days, Airbnb is using a two-tier structure where it sells Class A shares to the public, with each of those shares offering one vote per share; and it has Class B shares — which are owned only by its founders, execs and key investors — that come with 20 votes per share.

The company has also set aside more than 9 million shares of a third class of shares, Class H, for an endowment fund that benefits hosts. These shares have no voting rights and can be converted at any time into a share of Class A stock.

Airbnb hasn’t revealed the price it plans to sell shares on the public markets. So it’s not possible to know how much each person’s stake is worth at this time. Still, in October, the company told some of its shareholders in an email that they will receive two shares for every one they own, Bloomberg reported. Following the so-called stock split, common shares were worth $34.88 each.

So, just for fun, we calculated the total value of each major shareholder’s stake by pricing all of their shares, no matter their class, at $34.88.

This does not indicate the shareholder’s profit after buying their shares. Investors who took a chance on Airbnb at the seed stage bought in at $0.01 a share, according to the filing, while late-stage investors paid as much as $52.50 per share before each of those shares was split into two shares.

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It’s also worth noting that Airbnb has many more private investors who are not listed in the S-1 filing. Some of them have already cashed out and done well. Insiders sold $75 million of Airbnb stock in so-called secondary transactions, where shareholders sell their stock directly to other private investors, according to PitchBook, a database that tracks the private markets.

Here are the people who can cash out huge paydays when Airbnb goes public.

SEE ALSO: Airbnb’s IPO filing reveals exactly how the pandemic has devastated its business — and the startup is already projecting a winter decline as COVID-19 cases surge

Sequoia Capital, investor: $2.8 billion+

Alfred Lin, a partner at Sequoia Capital, was initially a skeptic. He thought a startup that asked people to open their homes to complete strangers “was a crazy idea,” he told Fortune in 2019.

It was Brian Chesky’s “ability to tell stories” that won him over, he said. The startup founder could describe the arc of the business, “while many people in the entrepreneur space only talk about the vision.” He also appreciated that Chesky understood the obstacles ahead.

Sequoia Capital led Airbnb’s seed round in 2009, writing a check for $585,000, according to a report in the New York Times. The VC firm has participated in every funding round since and is now …read more

Source:: Businessinsider – Tech

      

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