Stripe Raised $7 Billion to Pay Its Employees Tax Bill
A Facebook invention let startup workers delay taxes for up to a decade, and Stripe's decade was up.
In early 2023, Stripe needed nearly $7 billion, not to expand, but to keep its own workers from owing the Internal Revenue Service an estimated $2 billion to $3 billion because stock they held would count as taxable pay.
The bind started a decade earlier with a payroll invention from Facebook. When Facebook was still private, it created dual-trigger restricted stock units, a kind of employee stock that lets workers delay paying tax until the company has a liquidity event like a public listing. The IRS allowed the delay, but not forever. Most companies, including Stripe, set a deadline of roughly seven to ten years to settle up.
By 2023, those earliest deadlines were almost here. If the company did nothing, employees would owe ordinary income tax on shares they could not yet sell. Its choice was to go public in a frozen market for tech listings, or raise several billion dollars privately so the company could cover the withholding bill.
Stripe co-founders, brothers Patrick and John Collison, told their longtime investor Thrive Capital that they would go public unless they could raise the private round. Over dinner in Paris, Joshua Kushner, Thrive's founder, and Vince Hankes, a Thrive partner, offered to anchor it with nearly $2 billion, then help find the rest. Kushner and Kareem Zaki, another Thrive partner, then carried the offer in person to Patrick Collison's house.
The round was open to nearly any firm, yet John Collison said several well-known ones still passed. Zaki recalled, "They were so stuck on trying to get the 2023 number right." Hankes remembered the nitpicking, that people said Stripe was less profitable than its Dutch rival Adyen, and questioned whether Patrick and John were still the right founders for the next decade.
Thrive bet instead on a longer question, whether e-commerce would keep expanding in the coming ten years, and whether Stripe could expand beyond its roughly 2% global market share.
The round bought time. John Collison took over as finance chief, cut costs, and within a year lifted the business from about zero profit to keeping almost twenty cents of each dollar it brought in. Stripe grew more than 25% in 2023, and secondary shares that had traded at a $50 billion valuation rose to $65 billion, then to $107 billion by September 2025.
Questions people ask
What is a dual-trigger RSU?
A restricted stock unit is a promise of company stock that becomes real shares when conditions are met. A dual-trigger version has two conditions, staying employed for a vesting period and a liquidity event like an IPO or acquisition, so private-company workers do not owe tax before they can sell.
Why didn't Stripe just go public?
Going public would have created tradeable shares and cash to pay the tax, which is why Stripe was working with Goldman Sachs on an IPO. Thrive offered a private alternative, $1.8 billion from itself plus about $5 billion from others, at roughly half Stripe's prior valuation, to avoid listing when tech stocks had cratered.
Why was the tax bill so large?
The IRS treats vested RSUs as wages, taxed as ordinary income at rates up to 37% federally plus state tax, rather than at lower capital gains rates. That is why $5 billion in Stripe shares implied a $2 billion to $3 billion bill, due even if employees never sold a share.