• September 22, 2023

Expensify IPO Could Make Nearly All 140 Employees Paper Millionaires

  • Forty percent of Expensify’s employees became paper millionaires after its IPO, Insider has learned.
  • The company also announced an unusual stock grant that could make the rest of them millionaires.
  • The grant is designed to give employees voting power and keep them at the company for many years.

Expensify employees stood on an observation deck in New York ringing souvenir bells and drinking champagne to mark the company’s initial public offering on Wednesday — and celebrate the millions of dollars of wealth created for them in its $3.87 billion public debut.

Of Expensify’s 140 employees, more than 50, or about 40%, have fully vested options worth $1 million or more at a price of $27 a share, which was the IPO sale price, Ryan Schaffer, its chief financial officer and longtime employee, told Insider exclusively. The company raised $70.2 million at that price. Then, shares opened higher, at $39.75.

All the rest of the employees may become millionaires, too.

Expensify employees marked the occasion with "E"-shaped bagels and souvenir bells.

Expensify employees marked the occasion with “E”-shaped bagels and souvenir bells.

Maggie Reil

Who wants to be a millionaire?

The company told employees Wednesday that it created a long-term stock grant of 10% of its pre-IPO shares to distribute to people who joined the company before June, an Expensify spokesperson said.

With the grant, virtually all 140 Expensify employees could become paper millionaires, Schaffer said.

But there are a few catches. Those shares will fully vest over eight years with a one-year cliff, meaning employees get nothing if they leave before the first year. Because the stock grant contains a type of share called a long-term 50 — which gives employees startling voting power at 50 votes per share — employees need to notify the company of their intent to sell. They then must wait a minimum of 50 months to sell. So the soonest an employee could sell their first tranche is after five years. If an employee decides to quit, their shares stop vesting, but they can still sell their vested shares after 50 months.

This type of grant is highly unusual for a multibillion-dollar tech company — and a welcome surprise to employees, even if some won’t realize their full riches for more than a decade. Four to five years is a more typical vesting schedule.

Expensify’s outspoken founder and CEO, David Barrett, told Insider the company wanted to pay back the team that built it from a scrappy software startup to a $2 billion business and give them incentives to stay.

As for the 50 votes per share, “people need to feel like they’re a part of something that they actually control,” Barrett said.

Expensify employees gathered in New York on the day of its public offering.

Expensify employees gathered in New York on the day of its public offering.


Happy employees

The announcement came just weeks after a revolt at Mailchimp, where most employees had no equity in the company when its founders made billions in a megasale to Intuit. Some employees told Insider’s Ben Bergman they were planning to quit over the situation.

Expensify has done the opposite. Employees start with roughly one-third of their compensation in equity and have compensation reviews twice a year where they can opt for even more of their pay in equity.

“Our goals are to live rich, have fun, and save the world, and we feel that if we create these conditions for employees, they’ll never leave,” Schaffer said from the observation-deck party.

Several employees told Insider that they couldn’t be happier.

Expensify employees Maggie Reil, left, and Caitlin White take a selfie at a party in New York to mark the company's first day of trading.

Expensify employees Maggie Reil, left, and Caitlin White take a selfie at a party in New York to mark the company’s first day of trading.

Maggie Reil

Six years ago, Maggie Reil replied to an Expensify job ad in her local Michigan newspaper. She had just returned from the Peace Corps and could hardly believe that a Silicon Valley tech startup was hiring in her hometown. She worked her way from customer support to marketing to the operations team, where she now works on fraud-risk management.

Last year, she sold back some of her options to the company in a secondary transaction and used the money for a down payment on her first home. But she doesn’t plan on selling more shares now that Expensify is public, she said.

“Over time, they’re going to be worth more and more,” she said. “I think I’ll just hold on to it.”

Carlos Alvarez Divo, an engineering director who’s been with the company eight years, said he knew the risks of leaving his country of Venezuela and joining a startup on a work visa, but believed in the team and took the plunge. He soon opted to receive half of his salary in equity.

Another longtime employee, Matt Allen, who works in business development and strategic partnerships, said he chose to take equity for 70% of his compensation and then live “frugally” with his partner in a garage in Portland, Oregon, near Expensify’s headquarters. 

“I sort of live paycheck to paycheck because of my choices, and fortunately, nothing really bad has happened,” Allen said. “This is the best opportunity I’ve ever had, 100 times over. It made sense to risk as much as I could.”