A tech founder in San Francisco bid $400 thousand over asking for a house in Noe Valley and lost. He did not lose to a bigger check. The seller picked a buyer who offered pre-IPO shares of OpenAI instead.
The founder’s text exchange with his realtor spread across social media in early July, and it put a name on something agents around the Bay Area say they are seeing more often. Kevin O’Connor, an associate broker with Sotheby’s, told ABC7 that sellers want a way in. “I think the motivation is to get the jump on things,” he said. In his view the habit is brand new. “Right now, it is in the infancy stage,” O’Connor said.
Why a seller would say yes
San Jose State’s Ahmed Banafa, who studies the tech industry, understands the pull. Think of it like taking a foreign currency you expect to strengthen: the seller is betting the shares will be worth more than the dollars on the table. “They trust that this company is a good company and that this company is a company that can deliver based on everything they’ve heard about it,” Banafa said.
The company gains too, in his reading. When shares work like money, the stock itself looks more valuable. And plenty of sellers have already watched other tech names climb, so the gamble feels reasonable to them.
The catch
Here’s what it means for an ordinary seller: the tax side can sting. Banafa warned that the shares could lose value after a company lists. Someone who takes shares at a high price and sees them slide could end up with an outsized tax bill. Industry experts expect OpenAI to list as early as autumn, so the answer may arrive quickly.
Wired found that the idea is not limited to OpenAI. In the same city, an Edwardian house at 160 Noe Street in Duboce Triangle was priced at $2.9 million, payable in dollars or in an equal value of Anthropic or OpenAI stock. Listing agent Rachel Swann said she got the idea after meeting Anthropic employees with large paper fortunes and little cash. In Healdsburg, Vijay Chattha put his home up at $2.5 million, or $2 million if the buyer paid with Anthropic stock. Of how that would work, he said: “I have no idea.”
The practical hurdles are real. Anthropic’s policy says that a sale of its shares without proper board approval is invalid. Real estate agent Helena Zaludova called such listings a “clever gimmick,” noting that escrow companies cannot handle securities that are not publicly traded. Wired put the median house price in San Francisco above $2 million, which leaves little room for a mistake on either side.
Chattha, for his part, offered Anthropic employees a $500,000 discount on his house.
Sources
- Buying homes with pre-IPO OpenAI stock? New trend going viral in San Francisco
- What's Worth More Than Cash in San Francisco Real Estate? Anthropic Stock
