When a startup founder shepherds his company to a successful exit (IPO), what are the paydays like? We dove into the major tech IPO’s of 2018 and 2019 to find out. Note that paydays aren’t necessarily what the founders took home at the IPO (shares are usually subject to a 6 month lockup), rather they’re what the founder was worth at the IPO price on the day the company IPO’d. It’s not the same as cash, but it still feels quite good. The data is below.
A few observations stand out.
The paydays are massive. The median and average paydays were $268mm and $708mm respectively. Median and average ownership were 9% and 11% respectively.
Uber & Spotify. The Uber, Zoom, and Spotify founders did exceptionally well, clearing well over a billion. Note that in the case of Zoom, the founder owned 19% while at Spotify the founders owned 28% and 13% respectively. A big exit is one way to have a great payday, but preserving as much equity as possible by staying cash efficient or raising at lofty valuations certainly helps.
Ping was the smallest. The smallest founder payday was that of Ping. Andre Duand owned 2% of the business but was still worth $20mm upon IPO. That’s a big departure from some of the billion dollar paydays, but still quite good.
If this data doesn’t get you off the couch and coding the next great product, I don’t know what will. All joking aside, should you make it to the promised land (IPO), you can do quite well as you can see. Preserving as much equity as you can along the way could also be the difference between a $20mm payday and $6.5bln payday (Spotify).
Visit us at blossomstreetventures.com and email us directly with Series A or B opportunities at email@example.com. You can also connect with me on LI. We invest $1mm to $1.5mm in growth rounds, inside rounds, and other ‘special situations’ all over the US & Canada.