San Francisco-based payments technology company Square (SQ) - Get Report the needs to work a bit harder to wow its investors.

Square shares plummeted 20% on Friday from a Thursday close of $13.05 to trade around $10.48 in early afternoon trading following the company's first quarter results announcement on Thursday.

TheStreet's founder Jim Cramer said he didn't like Square's first quarter.

"They have some credit risk," he said adding that the company, which lends to small businesses through its Square Capital business, has a default rate of around 4%, compared to an average default rate of 2.67%.  

"Is Square going to be like an On Deck (ONDK) - Get Reportand Lending Club (LC) - Get Report? We don't want that," Cramer said. The Square release also revealed that "two new investors signed at the end of April and have recently begun to ramp funding." The release continued that "this speaks to the consistent performance of the Square Capital product."

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In its first quarter results announcement, the company called 4% a low default rate. Square also added in the announcement that it extended $153 million in Square Capital through more than 23,000 advances and loans in the first quarter. In fact, the amount of capital extended has tripled year-over-year.

Square reported a total net revenue of $379 million for the first quarter of this year compared to $374 million in the fourth quarter of 2015. The company's gross profit for the first quarter only increased a smidgen from $109 million in the fourth quarter to $110.2 million.

The company also reported an increase in its operating loss from $47.8 million in the fourth quarter to $97.1 million in the first quarter.

The first quarter results came at a critical time as there is a big lock-up expiration coming up in a few weeks and its venture capital backers "may get out," Cramer said. Venture capital firms Citi Ventures, Sequoia Capital, and Khosla Ventures are among Square's investors.

Square was founded in February 2009 by Jack Dorsey, who is also a co-founder and CEO of Twitter, and Jim McKelvey. Dorsey is CEO at both companies which has many wondering whether he is spread too thin to concentrate on truly improve either company.

 Twitter shares are down 38% year-to-date. The company's shares are down around 20% year-to-date.