top of page

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:

​

(1) Square's business model

Description of card payment markets and the (per-unit) economics of Square's product 

​

(2) Square's Venture Capital funding

Square's funding history and cap table; detailed description of VCs' contractual cash flow rights

​

(3) Square's (IPO) valuation

DCF valuation model of Square at the time of the IPO

​

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

MS Excel Icon.png

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).

​

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.

​

Covered Rights:

  • Conversion Rights

  • Redemption Rights

  • Voting Rights

  • Pay-to-Play Rights

  • Tag Along- and Drag Along Rights

  • Liquidation Preferences (Seniorities and Multipliers)

  • Participation Preferences

  • IPO Ratchets

​

The lecture contents are based on my original research on shareholder rights in Venture Capital.

Click to Enlarge

Download all case study documents below:

Case Study

square case_jpg.jpg
PDF Icon.png

Slide Set

vc_slides_square_jpg.jpg
PPTX Icon.png

Square CoI

square_coi.jpg
PDF Icon.png

Spreadsheet

square_excel_jpg.jpg
MS Excel Icon.png
bottom of page