A new kind of equity program

In my 15 years working on startups, one of the most powerful and recurring lessons I’ve learned is that people are what make or break a company. So at Cruise we strive to create an environment where the absolute best people want to work. This takes things like a strong mission and values, personal growth opportunities, solid execution, and attractive compensation. When it comes to compensation, however, job seekers are typically forced to make a choice based on their personal appetite for risk:

1. Join a smaller private company with potential for the stock price to rise rapidly (but risk that the company dies before you can sell any shares).

2. Join a public company where you can sell shares as soon as you vest them (but risk that the stock price won’t climb very quickly or even at all).

The world has become a bit more complicated lately. Private companies are waiting to go public for longer, so many employees join after the most aggressive stock price appreciation has occurred. And in recent years some of the best public tech companies have grown as fast as smaller, private companies. This puts private companies at a disadvantage vs. their public peers, since their employees are sitting on stock they can’t easily sell and the stock price isn’t growing substantially faster than their public competitors.

So why not go public to level the playing field when competing for talent? Historically an IPO has been synonymous with success in Silicon Valley, and we re-enforce that belief by ringing bells and popping champagne. The access to capital and the ability for shareholders to sell on an open market are certainly attractive, but the benefits of an IPO come at a great cost — distraction — that is often overlooked. Market volatility, daily price fluctuations, proxy battles, and increased overhead are just a few others. It’s not as rosy as we are led to believe.

The ideal solution for a company and its employees may be to provide IPO-like liquidity and potential upside for employees but without all the distractions of being a public company. Fortunately, we have figured out how to do that at Cruise. Today, I am pleased to unveil our new program: the Recurring Liquidity Opportunity (RLO).

Here’s how it works:

• Employees, both current and former, can sell any amount of their vested equity at each offering, which we plan to do once per quarter. Equity is purchased by General Motors or others.

• The equity purchase price will be determined by our most recent valuation conducted by an independent third party, which generally occurs on a quarterly basis.

• We expect this value to grow as we continue to successfully deploy and scale our technology.

I’m proud of our team for finding a path to make this work at Cruise, which at our size is no small task. While an RLO may not be ideal or feasible for many private companies (we are somewhat unique in having access to significant liquidity via General Motors and others), I believe it is exactly what Cruise needs right now. Our cash position is strong, so an IPO is not a necessary or appropriate distraction at this time.

It’s hard to believe I took Cruise’s first ever driverless ride in San Francisco just four months ago, since we’ve already significantly scaled up to meet user demand. Our early public riders love the product, so we’re eager to expand. It will take nearly 100% of our bandwidth to do this well, so the simplicity and competitiveness of our RLO will keep our attention exactly where it needs to be — creating a better world by deploying driverless cars at scale.

If you like the way we put our people first and keep the focus on our mission, please come join us.