Hello and welcome back to Equity, a podcast about the business of startups, where we unpack the numbers and nuance behind the headlines. This is our Wednesday show, where we niche down to a single topic, think about a question and unpack the rest. This week, Natasha and Anita asked: When is a company taking internal valuation cut a good thing? Normally, when we hear about valuations going down, that's a red flag that things aren't going well at a given company or in the market at large. We wrote about Stripe's 28% internal valuation cut earlier this month and as we listened to different reactions to the news, we noticed some people had an unexpected take -- that this downward revision was actually a positive for the company's employees. That's because the cut came from an internal 409A valuation appraisal, which is totally different from the investor-led valuations we normally hear reported on in the news. So we brought on two experts -- Phil Haslett of EquityZen and Sumukh Sridhara of AngelList -- to help us unpack what this valuation cut actually means for startup employees and what else they need to know about their equity compensation heading into a market downturn. For more information, you can also check out our TechCrunch+ piece about the matter, "Stripe’s new and lower internal valuation, explained." Let us know if you want more Chain Reaction x Equity crossover episodes by tweeting at either of us or just sharing this episode with a friend. Numbers speak for themselves :) Equity drops every Monday at 7 a.m. PDT and Wednesday and Friday at 6 a.m. PDT, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts. Credits: Equity is produced by Theresa Loconsolo with editing by Kell. Bryce Durbin is our Illustrator. We'd also like to thank the audience development team and Henry Pickavet, who manages TechCrunch audio products. Learn more about your ad choices. Visit megaphone.fm/adchoices