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A niche facet of startup employee pay, explained


Hello and welcome back to Equity, a podcast about the business of startups, where we unpack the numbers and nuance behind the headlines.
This is our Wednesday show, where we niche down to a single topic, think about a question and unpack the rest. This week, Natasha and Anita asked:
When is a company taking internal valuation cut a good thing?
Normally, when we hear about valuations going down, that’s a red flag that things aren’t going well at a given company or in the market at large. We wrote about Stripe’s 28% internal valuation cut earlier this month and as we listened to different reactions to the news, we noticed some people had an unexpected take — that this downward revision was actually a positive for the company’s employees.
That’s because the cut came from an internal 409A valuation appraisal, which is totally different from the investor-led valuations we normally hear reported on in the news. So we brought on two experts — Phil Haslett of E …

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