Column: How CEOs of Public Companies Should Think About Their Stock Price

Spencer Rascoff

Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.

Column: How CEOs of Public Companies Should Think About Their Stock Price

Congratulations! You've gone public, something to which many founders aspire but few achieve. In addition to the extra wind in your sails from the capital markets and the quarterly scrutiny of your performance (both huge factors to adjust to), you have a third concern: the stock price.


The stock price is a brand new unknown for founders of newly public companies, and (like everything else) no one really gives you a guide on how to do it well. For instance, how do you handle the balance between retaining the stock you own personally to show confidence in the company with your prudent desire to sell some stock and diversify? How do you keep in check your own PR, which can distort your perspective? And perhaps the most important to the health of your company, how do you mitigate the stock price's effects on your company's culture and prevent it from becoming a daily distraction which can impact employee morale and motivation? These are all questions I grappled with in my journey leading Zillow as a public company, and they are questions I receive periodically from CEOs of newly public companies.

1. Preset a Plan To Protect Yourself.

The roles of founder and personal shareholder will inevitably lock horns from time to time, and you need to protect both. My advice is to pre-set a plan for selling stock and creating liquidity for yourself, because every sale you make as CEO will be subject to scrutiny. A programmatic 10b5-1 plan helps you do this, as it allows you to sell a predetermined number of shares at a predetermined time. You don't have to pick and choose a date or price, and you don't have to explain to anyone -- shareholders, hedge fund managers, employees -- why you sold because it's all programmatic.

With a predetermined plan, you still need to decide frequency and quantity. It's nearly impossible to give blanket advice here, because everyone's situations are different. I've always opted to sell small amounts of stock along the way, and even though I've sold plenty of stock at lower prices than today's, I've never regretted a single sale. With a distributed approach, you can't really "mis-sell" at the "wrong" price.

In terms of how much to sell, if you haven't taken much liquidity to date, think in terms of what percentage of your holdings you'd want to sell in a given period of time. For example, a starting point could be aiming to sell 10% of your holdings each year for the first five years post-IPO, then reassessing this approach two or three years in. Taking more liquidity early on puts a premium on building your nest egg, enabling you to let plenty of stock ride in the long term but still putting away potentially life-changing money in the short term.

2. Invest in Objectivity To Keep It Real.

I cannot emphasize enough the importance of an outside advisor to help with personal money management and investment strategy. As a founder, you are the number one believer in your company because you brought it into existence. Of course it can be worth $100 billion someday. Why would you ever sell a single share of such a promising venture?

An outside advisor provides the more conservative end of that spectrum, tempering your unshakable conviction in the reality that most companies don't reach that stratosphere. Neither one of you is absolutely right, but representing both perspectives will land you somewhere in the middle where you're committed enough to the cause but diversified enough to protect yourself.

Please don't think you're immune from this blind spot; even the most cynical and risk-averse founder will believe their own PR and fall victim to it in the absence of objectivity.

3. Don't Let Stock Seep into Your Culture.

For newly public companies, stock is a valuable lever for attracting top talent. But once that talent is in the door, they shouldn't hear about stock anymore, outside compensation statements. Owning and selling stock is their business because they've earned it, just like they've earned their salary. Never give your people, including executives, a hard time for selling stock. Sometimes I hear stories about CEOs berating employees for selling shares, and I think it's one of the most ridiculous and damaging things you can do as a leader. As with everything in your culture, you set the tone for this at the top.

At Zillow, it was taboo (intentionally) to even talk about the stock price; we discouraged focus on the stock among our leadership and employees because it's terribly short-term, and companies that last focus on the long-term. There was, however, a time when I broke my own rule: The year we launched Zillow Offers, a game-changing evolution that expanded Zillow's business from media into hard assets, our stock price plummeted and many newer employees were completely underwater. There was anxiety afoot, and we needed to address it.

At our annual meeting, I showed charts of Amazon's stock price when it launched major innovations like third-party marketplace, Amazon Prime and AWS. In each of these instances, the stock took significant dives: -94%, -56% and -60%, respectively. I then showed Amazon's ascent to current day to make a point we'd made all along: Stocks go up, and stocks go down. Take care of our customers and focus on the long term, and the stock price will take care of itself.

My team and I debated the decision to break precedent and discuss the stock price internally because on the surface talking (at length!) about the stock price went against what we'd ingrained in our culture. But a couple days after our meeting, an employee emailed me with a heartfelt thank you for doing so. He appreciated the message to focus on the long term while recognizing the short-term realities of the stock fluctuation for employees -- in his example, money he and his wife were counting on to pay off student loans. Stock can be life-changing for many of your employees (not just you), and sometimes you need to talk about it.

The final point to this story, and to all of this advice, is that stock is personal. Sometimes you need to change the plan. Sometimes you have to break your own rules. Be strategic, not dogmatic, and you'll find the best path for you and your company as a public founder.

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OpenAI's $6.6B Power Play: The Future of AI Just Got a Massive Boost 💰🚀
Image Source: Open AI - Sam Altman

🔦 Spotlight

OpenAI is making some exciting moves! The company just completed a massive $6.6 billion funding round, pushing its valuation to an impressive $157 billion. Thrive Capital led the charge, with big names like Andreessen Horowitz and Founders Fund also joining in. This investment will allow OpenAI to further scale its operations and advance AI technologies like GPT-4 across various sectors such as healthcare, entertainment, and business.

But that’s not the only exciting news. OpenAI has also secured an additional$1 billion credit facility, giving the company even more financial flexibility to execute its ambitious growth plans. This safety net ensures that OpenAI has the resources to scale safely and effectively while continuing to lead the AI space.

AI is becoming integral to industries worldwide, and OpenAI’s products—like ChatGPT—are seeing rapid adoption. From education to enterprise solutions, the company is driving significant advancements in how AI is integrated into everyday life.

Following Microsoft’s $10 billion investment earlier this year, this latest round underscores the market’s confidence in OpenAI’s potential. With its strong focus on responsible AI deployment and ethical scaling, the company is set to shape the future of AI in a way that benefits a broad range of industries and addresses global challenges.

As AI evolves, OpenAI remains dedicated to pushing boundaries while ensuring that its innovations prioritize safety, scalability, and social impact. Keep an eye on this space—big things are on the horizon!


🤝 Venture Deals

LA Companies

  • Impulse Space, a Redondo Beach-based company specializing in in-space transportation services, raised $150M in Series B funding led by Founders Fund, bringing its total funding to $225M, to expand its team and advance production of its Helios and Mira vehicles. - learn more
  • Nusano has secured over $115M in Series C financing, led by The Wasatch Group, to accelerate the commercialization of its radioisotope production technology, aimed at improving cancer treatment and medical diagnostics. - learn more
  • Future Trash, a multidisciplinary creative studio, has raised a $5M Seed funding round from TIRTA and General Catalyst to develop original intellectual property (IP) within Fortnite, focusing on building unique in-game content and experiences. - learn more
  • XType, the leading software company for multi-instance management on the ServiceNow platform, has raised a $21M Series A funding round led by Norwest Venture Partners to accelerate innovation and expand its platform capabilities on the ServiceNow platform. - learn more
  • 3Laws Robotics, a robotics company focused on building AI-powered platforms to enhance the safety, security, and operational efficiency of robotic systems, has raised a $4.1M Seed funding round led by TenOneTen Ventures. - learn more

LA Venture Funds
  • Watertower Ventures participated in the $8M Series A funding round for DocJuris, a leader in AI-based contract review and negotiation software that automates key tasks to streamline the contract process for enterprise teams and general counsels. - learn more
  • Progression Fund participated in a $3.7M Seed funding round for Permanent, a company focused on advancing sustainable agriculture by developing solutions that improve soil health and productivity. - learn more


LA Exits

  • Loom, an educational community platform that empowers women by providing comprehensive resources on reproductive health, sexual wellness, and parenting education, has been acquired by women's health brand Perelel, marking a significant expansion in the women's health and wellness sector. - learn more

Download the dot.LA App

⚠️📲🌩️ Your Digital Lifeline: Top Tech Apps for Natural Disasters

Living in LA means being ready for anything—quakes, wildfires, crazy weather, you name it. Luckily, there’s a suite of tech apps designed to keep you informed, connected, and safe when disaster strikes. From real-time alerts to staying in touch with loved ones, these apps have you covered. Here’s the ultimate list to help you handle whatever chaos comes your way in LA County.

Get Real-Time Alerts

Image Source: MyRadar

FEMA App
  • What it does: Provides real-time alerts from the National Weather Service, along with shelter and disaster recovery info.
  • Key features: Weather alerts, shelter locator, and preparedness resources.
  • Available on:iOS | Android
MyRadar Weather Radar
  • What it does: Offers real-time, animated radar for tracking severe weather and storms.
  • Key features: Live radar, storm tracking, and severe weather alerts.
  • Available on:iOS | Android
Clime: NOAA Weather Radar
  • What it does: Delivers real-time radar and weather updates, with wildfire and flood tracking.
  • Key features: Customizable weather alerts, disaster tracking.
  • Available on:iOS | Android
American Red Cross Emergency App
  • What it does: Provides real-time alerts for over 35 types of emergencies, plus disaster preparedness tips.
  • Key features: Alerts, safety check-ins, and emergency tips.
  • Available on:iOS | Android
My Earthquake Alerts & Feed
  • What it does: Sends real-time earthquake alerts, with maps and detailed data.
  • Key features: Earthquake alerts, customizable notifications, detailed maps.
  • Available on:iOS | Android
Citizen
  • What it does: Delivers real-time alerts for emergencies, including natural disasters and crime near your location.
  • Key features: Safety alerts, live incident reports, and community updates.
  • Available on:iOS | Android

Stay Connected with Loved Ones

Image Source: Life360

While social media apps like Facebook and X provide real-time updates, additional tools can help with communication and location sharing, ensuring you stay connected and safe.

Nextdoor
  • What it does: Connects neighbors with real-time local updates on emergencies and community events.
  • Key features: Neighborhood alerts, local info, resource sharing.
  • Available on:iOS | Android
WhatsApp
  • What it does: Enables secure messaging, location sharing, and video/voice calls with family and friends.
  • Key features: End-to-end encryption, location sharing, voice/video calls.
  • Available on:iOS | Android
Zello Walkie Talkie
  • What it does: Turns your phone into a push-to-talk walkie-talkie for communication in low-signal areas.
  • Key features: Push-to-talk, works over Wi-Fi/data, group communication.
  • Available on:iOS | Android
Glympse – Share Your Location
  • What it does: Lets users share real-time locations with family and friends without needing an account.
  • Key features: Location sharing, ETA updates, private tracking.
  • Available on:iOS | Android
Life360
  • What it does: Tracks real-time location of family members and provides emergency SOS alerts.
  • Key features: Family location tracking, emergency alerts, crash detection.
  • Available on:iOS | Android

Stay Mobile

Image Source: PlugShare

For navigating road closures and traffic during disasters, Google Maps and Waze are essential tools that offer real-time updates and alternate routes. Along with these go-to options, there are additional apps that can help you stay mobile when it matters most.

GasBuddy
  • What it does: Locates nearby gas stations and provides real-time updates on fuel availability and prices.
  • Key features: Gas station locator, fuel prices, availability checks.
  • Available on:iOS | Android
PlugShare
  • What it does: Provides a comprehensive map of public EV charging stations worldwide. It offers real-time availability, pricing, user reviews, and photos of charging stations, helping you find the best nearby options.
  • Key features: Real-time station availability, detailed station info, user reviews, and trip planning.
  • Available on:iOS | Android

Traditional Preparedness Tips

In addition to these tech apps, it’s crucial to prepare for natural disasters with traditional methods:

  • Build a disaster kit: Gather essential supplies like food, water, first aid supplies, and a flashlight.
  • Develop an evacuation plan: Determine where you will go and how you will get there in case of an emergency.
  • Keep emergency contacts handy: Make a list of important phone numbers.

Maximize Battery Life and Data During Emergencies

During disasters, power outages and increased network traffic can affect your device's battery life and data usage. Consider the following:

  • Keep your devices charged: Use portable or solar-powered chargers to extend battery life.
  • Conserve data: Use Wi-Fi hotspots when available to avoid excessive data charges.

These apps are your go-to tools for staying informed, connected, and ready for anything in Los Angeles County. Whether you need real-time alerts, navigation assistance, or ways to keep in touch with loved ones, having these apps on hand can make all the difference when it matters most.

Download the dot.LA App

Luxurious Second Home Ownership without the Headache: How Pacaso is Changing the Landscape of Real Estate

🔦 Spotlight

Pacaso addresses the pain points of second home ownership, offering a luxurious, flexible, and financially sound alternative to traditional second homes and ultra-luxury hotels. Co-founded in 2020 by entrepreneur Austin Allison and former Zillow executive and prominent LA tech figure Spencer Rascoff, Pacaso, an unicorn startup, has redefined vacation home ownership with its unique co-ownership model. Rascoff's contributions to the LA tech scene extend beyond real estate; he also founded 75 & Sunny, an LA-based startup studio and venture fund, and co-founded dot.LA, an LA tech news and events company.

LA residents adore Pacaso for its lush vacation destinations that also make for smart investments. Pacaso offers everything from serene weekend getaways in Aspen to sophisticated escapes in Paris. Each residence, valued between $200k to over $2M for 1/8th, boasts meticulous design, high-end furnishings, and premium amenities. Unlike traditional second home ownership, which involves high costs, maintenance, and underutilization, or ultra-luxury hotels, which lack the personal touch and investment potential, Pacaso's co-ownership model offers a superior solution. Co-owners enjoy the benefits of a high-end vacation home without the full financial burden and hassle of sole ownership, making it a smarter and more flexible choice for discerning buyers.


Image Source: Pacaso

Cabo, Mexico

$822,000 (1/8th ownership)

5 bds. l 5 ba. l 4,969 sq ft

View Here


Image Source: Pacaso

Paris, France

$600,000 (1/8th ownership)

2 bds. l 2.5 ba. l 1,410 sq ft

View Here


Image Source: Pacaso

Malibu, California

$750,000 (1/8th ownership)

3 bds. l 3 ba. l 1,880 sq ft

View Here


Image Source: Pacaso

Park City, Utah

$755,000 (1/8th ownership)

4 bds. l 4.5 ba. l 2,584 sq ft

View Here

Head to Pacaso to learn more about its innovative co-ownership model that addresses the common challenges of second home ownership!


🤝 Venture Deals

LA Companies

  • Oak Essentials, the natural skincare brand founded by Jenni Kayne, has raised an undisclosed amount in Series A Funding from Silas Capital and Unilever Ventures. This investment will drive the brand’s expansion, focusing on product development, boosting marketing efforts, and expanding distribution channels. - learn more
  • Playhouse MD, an upcoming children’s healthcare platform that incorporates play to enhance health outcomes, has raised $4M in funding, according to a recent SEC filing. - learn more
  • FluidLogic, a high-performance hydration system provider, raised $15M in a Series A Extension led by Solyco Capital to support product development and innovation for adventure sports and outdoor endurance categories, with consumer products launching in early 2025. - learn more
  • Reflect Orbital, which uses in-space reflectors to direct sunlight to solar farms and large-scale lighting applications after sunset, has raised $6.5M in seed funding led by Sequoia Capital. The funding will help the company develop production vehicles and expand its team as it builds space-based energy infrastructure. - learn more

LA Venture Funds
  • Smash Capital led a €20M Series B round into Vilnius-based Ovoko, an e-commerce platform for buying and selling used car parts across Europe, marking Smash Capital's first investment in Lithuania. The funds will support Ovoko's product development, market expansion, and team growth as it aims to dominate the European market for second-hand automotive components. - learn more
  • M13 led a $9M Series A Funding Round for Zenlytic, the world’s first self-serve business intelligence platform. - learn more



LA Exits

  • Continuum Global Solutions’ healthcare vertical has been acquired by Everise, a customer service management company, enhancing Everise’s capabilities in pharmacy benefit management and expanding its growth prospects in the healthcare sector. - learn more
  • Radical Semiconductor, a company specializing in processing-in-memory technology, has been acquired by BTQ Technologies, a leader in post-quantum cryptography. This acquisition strengthens BTQ’s ability to secure data in the post-quantum era by integrating Radical Semiconductor's advanced technology portfolio. - learn more

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