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[OpenAI] Profit Participation Units -How to Value?
Currently in the interview loop for OpenAI and (thinking optimistically) trying to understand how to view the potential value of their PPUs. For example, of the recruiter quoted you PPUs with an estimated value of 2.5M, I understand that is based off the sale price in there most recent tender but curious how these would work if you held them? For example:
1) can OAI even go public one day? If so, at that point would PPUs just convert to equity?
2) Or doe PPUs function almost exactly like what's written on the box i.e. they give you a right to x% of the companies earnings only
3) Or is the long game plan really just to hold until you hit your risk tolerance threshold and sell in the next tender offer?
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KartikAeTechnical Program Manager
From what I've read, it seems like you have it right pretty much.
I didn't think that it gave you right to a % of the company earnings, I just thought that each unit would sell essentially like an RSU so it'd have a flat value per PPU when you sell. I know up until now, they've only sold them through tender offers which they say they have fairly regularly.
It seems like they work like options pretty much, so if they do IPO, presumably they'd turn into Options in the sense that you could sell the PPUs for cash or Stock, but this one I'm not as sure on.
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