Square

About

Square (now Block, Inc.) is a financial services and digital payments company founded in 2009 by Jack Dorsey and Jim McKelvey in St. Louis, Missouri ¹. The company was born when McKelvey, a glass artist, lost a $2,500 sale because he was unable to accept an American Express card at his glass blowing studio ². He called Dorsey, and within three weeks the two had built a credit card reader that plugged into the headphone jack of an iPhone and an app that processed credit card payments ².

McKelvey realized there was a massive underserved market of small companies that accepted few or no credit cards because of complicated contracts, expensive equipment, inexplicable charges, poor customer service, and difficulty in even qualifying ². The initial product broke 17 laws, which the founders had to navigate as they built the business ².

Square went public on November 19, 2015, listing on the New York Stock Exchange under the ticker SQ, with shares priced at $9 and the company valued at just under $3 billion ³. Shares climbed to nearly $15 on its first day of trading, settling at just over $13 ³. In December 2021, the company changed its corporate name to Block, Inc. to reflect its expanded product portfolio beyond Square’s point-of-sale products ¹.

Square raised a total of $520 million across 12 funding rounds from 61 investors ⁴. The company is headquartered in San Francisco, California ¹.

Funding History

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What Investors Say

Marc Andreessen expressed regret about missing the opportunity to invest in Square: “The biggest one that we’re still kicking ourselves over is probably Square. I think Jack Dorsey is one of the most phenomenal founder-CEO’s in the industry and we probably made a huge mistake on that one when he first came in. We overthought the deal and we probably just should have said Jack Dorsey, check. And write the check” ⁹.

Khosla Ventures led Square’s first funding round, a $10 million Series A at a roughly $45 million valuation in 2009 ⁵. Khosla Ventures ultimately ended up with 50.5 million shares, or about 15% ownership ¹⁰.

Sequoia Capital participated in two rounds of Square’s funding, buying in at 72 cents per share and 95 cents per share, resulting in a return of approximately $204.5 million at IPO ¹⁰.

What Founders Say

Jim McKelvey on the origin of Square: He lost a $2,500 sale because he couldn’t accept a credit card at his glass blowing studio, leading him to call Jack Dorsey about solving the problem ².

McKelvey on finding the right partner: “Recognize your personal weaknesses and find the right partner — in his case, Jack was a perfect partner for Square because a lot of the things he’s good at, McKelvey is terrible at, and vice versa” ².

On motivation: McKelvey stated that “the best motivator, at least for me, is a problem you care deeply about solving” ¹¹.

On entrepreneurship: “Taking that first step is really the hardest part” ¹¹.

Jack Dorsey on Square’s mission: The company was built to address the reality that millions of small businesses were shut out of the credit card economy due to complicated contracts and expensive equipment, with Square providing “a straightforward way for artists and vendors to accept credit cards” ¹.

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