Stripe's Strategic Investments

Ryan Breslow shares how Stripe allegedly used strategic investments to prevent competitors from raising funding.

"When we would pitch investors, they'd get interested and say they want to invest. Then they would talk to somebody at Stripe or someone related to Stripe and either be told they can't invest or shouldn't invest. Many investors told me directly 'I got a call from Stripe and they told me I can't invest in you guys.'

What Stripe did was put all the big names in Silicon Valley on their cap table. They intentionally got every tier-1 firm invested in them, even with small checks. They basically put everybody on their cap table. Then when we tried to raise money, they would tell these investors they were conflicted out since they were Stripe shareholders.

They did this with companies doing card issuing, subscription payments, and anything in their periphery. They would make sure these companies couldn't get off the ground, and then they'd go build those products themselves.

I've never told a single investor they can't invest in somebody else. To me, everything is fair competition. If someone wants to invest in a company tangential to me, I tell them go for it. We've even invested in tangential companies ourselves. But Stripe's approach was different - they made sure anything in their space couldn't get funding."