Just because you don't have to do something doesn't mean that you shouldn't do something.
Share on linkedin Rippling, the Silicon Valley onboarding juggernaut founded by Parker Conrad, has banned ex-employees from participating in a large stock tender offer if they currently work for any of eight rival companies.A source says that there was over $2 billion in sell-side demand. This is despite the aforementioned ban, plus unrelated restrictions on RSU holders, company co-founders, and post-Series B investors., confirmed by Axios, and heavily debated on social media over the weekend.
In fact, the only legal responsibility that tendering companies have is to provide financials and material disclosures to potential participants, all of whom receive them under NDA. It's these disclosures that Rippling used to justify its ban on ex-employees at rival companies, arguing that providing such information would put it at a competitive disadvantage.Ex-employees who vested stock options helped generate the value being recognized in a tender offer. Excluding them feels punitive in a tender with over half a billion dollars available. Current employees see how their former colleagues are being treated.
The disclosure concerns are understandable, but overstated. If large rivals to Rippling don't know the broad strokes of its financials, then they're not worthy rivals. And if Rippling really thinks an NDA will stop dissemination of its data — despite sending it to hundreds of individuals and investors — then it's being unrealistic.Startup stock tenders have become more prevalent and important as companies stay private longer. As such, they're also under more scrutiny.Share on facebook Share on email
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