Six of Yelp’s top executives and investors cashed out $36.8 million worth of Yelp stock during the company’s most recent funding round, according to a filing the company made Thursday indicating that it soon plans to go public.
The biggest cash outs were made by CEO Jeremy Stoppelman and board chairman Max Levchin, who each sold approximately $15 million of stock in connection with the Series E raise.
Also at that time, COO Geoff Donaker received $3.9 million; VP of sales Jed Nachman and former CFO Vlado Herman each netted around $1 million; and general counsel Laurence Wilson cashed out about $691,000 worth of stock in the company.
The stock sales were all made to Elevation Partners, according to the filing, which reads: “In connection with the Series E Financing in February 2010, we were also party to a series of stock transfer agreements with affiliates of Elevation Partners and many of our stockholders, including one of our directors and certain of our executive officers.” The Series E round itself brought in $25 million for Yelp.
It is not unusual for executives and founders to cash out some stock holdings before the company’s main liquidity event (typically either a sale or an IPO.) And to be clear, Yelp’s top brass did not directly pocket any of the Series E funding; they simply sold portions of their own stock to outside investors eager to have bigger stakes of the company. Even so, the size of Stoppelman’s and Levchin’s pre-IPO stock sales could raise a few eyebrows — particularly among Yelp’s rank-and-file employees who have yet to cash out their stock holdings.
Here is a screenshot of the relevant portion of the S-1 (click to enlarge):