The marketplace for handcrafted goods plans to reserve a small pot of shares for its users.

By Erin Griffith
March 31, 2015

Etsy, the marketplace for handcrafted goods, said that it expects a valuation of up to $1.78 billion in its planned initial public offering.

The new details, revealed Tuesday in a regulatory filing, include the expected pricing of 16.67 million shares for $14 to $16 each. If the IPO prices at the upper end of that range, the company will raise $266.65 million.

Etsy, based in Brooklyn, filed its initial paperwork for an IPO in early March. The company is known for its marketplace of handcrafted and vintage goods and apparel.

Etsy said it plans to trade its common stock on the NASDAQ with the ticker symbol “ETSY.” An investor roadshow will kick off on April 1.

Etsy’s community of buyers and sellers is an important part of its success, so the company has made plans to reserve up to 5% of shares it is issuing in the IPO for individual investors. Morgan Stanley is executing the participation program, which allows users to invest as much as $2,500 each in the IPO.

But investors should be wary of buying Etsy shares, according to Fortune’s Stephen Gandel. The company’s losses have widened in recent years (unless you count the $23 million figure it handcrafted for its bottom line), and revenue from sales has slowed.

There are other concerns around Etsy’s ability to stay authentic as it grows, which I noted at the time of the company’s initial S-1 filing:

A few years ago, Etsy lifted some of its stricter sales requirements, including a ban on sellers using certain manufacturing techniques and hiring staff that had been put into place to maintain the site’s homespun image. This gave the sellers that had made their Etsy shops into a full-time job the ability to expand, but critics warned that it might cause the site to lose what makes it special.

Those concerns resurfaced around reports of the company’s public offering. In its filing Wednesday, Etsy noted the importance of “authenticity of our marketplace and connections within our community,” as one of the cornerstones of its business.

“If we are unable to maintain them, our ability to retain existing members and attract new members could suffer,” the company’s regulatory filing said.

Nonetheless, Etsy’s IPO represents a win for New York’s growing ecosystem of tech companies. When the company makes its market debut, it will double the number of publicly traded companies based in Brooklyn to a grand total of two. The other, Dime Community Bancshares, went public in 1996 and has a valuation of $565 million.

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