- The CEO of Groq said that the company was about to miss money a few years ago.
- The semiconductor startup, founded by former Google engineers, has reduced the wages of most employees in favor of equity.
- Groq recently obtained $ 1.5 billion from Saudi Arabia to extend the delivery of AI fleas to the country.
The Groq semiconductor startup was once so close to sneaking that the CEO was inspired by the American fundraising during the Second World War.
Jonathan Ross, who founded the company in 2016 with a group of former Google engineers, said that it had taken seven years to find a product that would sell.
When a tightening of cash has approached, the CEO told his employees: “” We are going to lack money. We need you to exchange a salary for equity “” said Ross in an episode of the twenty -minute podcast VC downloaded on Monday.
He compared demand for the obligations of the Second World War, through which governments asked citizens to help finance their military efforts in the midst of a depressed economy.
“We have literally took photos of the war obligations and we have put grooq ties to it,” he said.
Ross said it was an “intense” decision because people who had left their careers elsewhere and had families about him. He said they were worried that everyone left – but 80% of employees participated. The reduction in cash remuneration helped Groq to remain afloat before the startup legally the first part of a fundraising cycle of $ 300 million.
In 2021, the AI hardware and software company closed a financing cycle of $ 300 million, co-directed by Tiger Global Management and D1 Capital.
Last week, Grok signed an agreement for $ 1.5 billion in Saudi Arabia to extend the delivery of its advanced AI chips in the Middle East country. In August, the company was estimated at $ 2.8 billion after raising $ 640 million on a round led by Blackrock, Cisco Investments and Samsung Catalyst Fund.
Paying employees in part in equity equity instead of any species is common for public and private technological companies. These actions encourage employee retention and serve as an incitement to return. Employees often exchange higher cash remuneration in companies established for a drop in cash and equity options in a startup, in Paris, equity could skyrocket.
Startups at an early stage sometimes temporarily reduce cash compensation in favor of equity in the company when they may lack money. The CEO of Grok is one of the few business leaders to have been public about the decision.
“If you look at this vulnerability, people will often accompany you,” said Ross on Monday about his employees Gran
Some of the largest startups in the world, including Openai, Stripe and Spacex, have enabled employees to sell their shares through tenders, which allows them to withdraw even if the company chooses to stay private or does not want to be acquired. A tender offer gives employees of private companies a chance to sell a certain number of shares at a fixed price for a limited period.
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