Square, Inc. Teaching Case Study
This teaching case analyzes Square, Inc., Twitter co-founder Jack Dorsey's fintech startup entering markets in 2010 with a card payment solution for small business merchants. The case focuses on three connected areas:
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(1) Square's business model
Description of card payment markets and the (per-unit) economics of Square's product
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(2) Square's Venture Capital funding
Square's funding history and cap table; detailed description of VCs' contractual cash flow rights
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(3) Square's (IPO) valuation
DCF valuation model of Square at the time of the IPO
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The case comes with a valuation spreadsheet, the original Certificate of Incorporation (CoI) containing all shareholder rights, and a slide set explaining the most relevant cash flow-, control- and voting rights Venture Capital investors typically receive upon investing. All available for free download at the bottom of this page!
Drop me a note?
If you feel like it - I'd love to hear from you if you choose to use the case study for your lectures. Many thanks!
Selection of Covered Topics
DCF Valuation for High-Growth Companies
Venture Capital Funding
Convertible Preferred Shares
Venture Capital Investor Rights (esp. IPO 'Ratchets')
FinTech (esp. Card Payments Markets)
Startup Business Models

Excel
Modeling
Excel-based DCF Valuation Model for Square Valuation
Description of Sample Slides
See Sample Slides Below
This sample lecture is part of a class on cash flow-, voting- and control rights in Venture Capital investments, as set forth in startups' Certificates of Incorporation (CoIs).
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It gives a theoretic explanation of the most important rights, along with numerical examples for the cash flow rights. All rights are taken from Square's CoI, which is representative of a 'typical' (i.e. industry standard) contract between Venture Capitalists and startups.
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Covered Rights:
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Conversion Rights
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Redemption Rights
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Voting Rights
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Pay-to-Play Rights
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Tag Along- and Drag Along Rights
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Liquidation Preferences (Seniorities and Multipliers)
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Participation Preferences
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IPO Ratchets
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The lecture contents are based on my original research on shareholder rights in Venture Capital.




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