Form 4: Battery Ventures Funds Distribute Braze Shares In-Kind, Maintain Significant Ownership

Battery Ventures and affiliated entities distributed Braze, Inc. Class A Common Stock and Class B Common Stock to their partners and members in a pro rata, in-kind distribution, while maintaining significant indirect ownership.

Summary

• Battery Partners XI, LLC, along with affiliated funds including Battery Ventures XI-A, L.P., Battery Ventures XI-B, L.P., and related side funds, reported changes in beneficial ownership of Braze, Inc. stock.
• The transactions primarily involve pro rata, in-kind distributions of Class A Common Stock and Class B Common Stock to the respective partners and members of these funds.
• These distributions do not represent purchases or sales but rather a change in the form of ownership.
• Despite the distributions, the Battery Ventures entities continue to hold significant indirect ownership positions in Braze, Inc.
• The reported transactions also include conversions of Class B Common Stock to Class A Common Stock on a one-for-one basis.
• Several individuals associated with Battery Partners, including Neeraj Agrawal, Michael M. Brown, Jesse R. Feldman, and Russell L. Fleischer, may be deemed to have voting and dispositive power over the securities held by the funds, but they disclaim beneficial ownership except to the extent of their pecuniary interest.
• The filing covers holdings for multiple reporting persons, including various Battery Ventures funds and associated individuals.

Sentiment

Score: 6

Explanation: The document primarily reflects a procedural distribution of shares. While there are no explicit negative indicators, the distribution could slightly increase market supply. The continued ownership by Battery Ventures is a moderately positive sign.

Positives

• The in-kind distributions suggest a potential alignment of interests between the funds and their partners/members.
• Battery Ventures maintains a significant ownership stake in Braze, indicating continued confidence in the company's prospects.
• The conversion of Class B Common Stock to Class A Common Stock simplifies the capital structure of Braze.

Negatives

• The distributions could potentially increase the number of Braze shares available in the market, which might exert downward pressure on the stock price, although the distributions are pro rata and in-kind.

Risks

• The disclaimers of beneficial ownership by the managing members of Battery Partners could create uncertainty regarding the actual control and influence over the shares.
• The complex structure of the Battery Ventures funds and their relationships could make it difficult to fully understand the ultimate ownership and control of Braze shares.

Future Outlook

The document does not contain specific forward-looking statements about Braze's future performance, but the continued significant ownership by Battery Ventures suggests a long-term interest in the company.

Industry Context

Venture capital firms often distribute shares of portfolio companies to their limited partners as part of the fund's lifecycle. This is a common practice and doesn't necessarily indicate a change in the firm's view of the company's prospects.

Comparison to Industry Standards

• The pro rata, in-kind distribution of shares is a standard practice among venture capital firms when returning capital to their investors.
• Similar distributions have been observed with other venture-backed companies post-IPO, such as distributions by venture funds holding stakes in companies like Snowflake or Datadog.
• The disclaimers of beneficial ownership by individual managing members are also standard legal practice to avoid undue personal liability.

Stakeholder Impact

• Shareholders may experience a slight dilution effect due to the increased availability of shares.
• Employees are unlikely to be directly impacted by this transaction.
• Customers and suppliers should not be affected by this change in ownership structure.
• Creditors are unlikely to be impacted by this transaction.

Key Dates

Keywords

Braze, Battery Ventures, beneficial ownership, Form 4, in-kind distribution, Class A Common Stock, Class B Common Stock, securities, reporting person, ownership