The list below shows founder or CEO ownership of 207 tech companies at IPO. The median level of founder ownership shown is 15% while the average is 20%.
A few things to consider:
The range is wide. Snapchat cofounders Evan Spiegel and Robert Murphy owned a combined 44% of Snapchat before it went public. Mark Zuckerberg owned 31% of Facebook, Sergey Brin and Larry Page owned 31% of Google, the founders of Eventbrite owned 34%, and Reed Hastings owned 24% of NetFlix. These are remarkable levels of CEO ownership upon going public/exit, but such high levels aren’t always the case. Glen Kelman of Redfin owned only 4%, the founder of Pandora owned only 2%, the Lyft founders owned 6% combined, and Peloton’s founder and CEO owned 6%. The range of ownership at exit/IPO can be wide and is dependent on a number of factors, the primary of which are capital efficiency and the ability to command high valuations during fundraising.
Valuation of rounds is criticals. Hot startups commanding high valuations can preserve founder equity. When Facebook and Snapchat IPO’d for instance, VC ownership was only 22% and 21% respectively.
Options, smaller investors, and others make up ~30%. Both the median and averages of the founders and VC sum to ~70%. That means smaller investors, employees, advisers, and others owned 30% of these businesses at IPO.
Some VC have the Midas Touch. A number of VC pop up repeatedly in different deals. For instance, Bessemer, Sequoia, Benchmark, Insight, and Accel are each in multiple deals. Sequoia and Benchmark lead the pack, listed in 23 and 18 IPOs respectively.
Strategics don’t matter. Only 33 of the companies shown had a strategic investor (16%).
SaaS only. Isolating just the 124 SaaS companies, The median level of founders ownership shown is 15% while the average is 19%.
Thank you for your readership. See more blogs and SaaS data at blossomstreetventures.com. Email the author at sammy@blossomstreetventures.com.