At a $40M valuation, Khosla got 25% of the company at that time. They have $10m&#x2F;$.22 shares or ~45M shares of the 182M shares you mention. They&#x27;re netting $9<i>45M (sale)-$10M(invested)=~$409M.<p>Between Series A and IPO they had roughly 40% of their stake wiped out through dilution. (45M&#x2F;182M=25%-&gt; 45M&#x2F;300M=15%) The dilution happened because, during that time Square issued 118M shares to investors in trade for the investor money. The company valuation at each round was determined by: Investment&#x2F;shares issued</i>Total shares outstanding after transaction.