If you didn’t make $1B this week, you are not doing VC right – ProWellTech
Five IPOs, many very, very happy VCs
The only thing rarer than a unicorn is a released unicorn.
At ProWellTech, we cover a lot of startup funding, but we rarely have the opportunity to cover exits. This week was an exception, however, as it was exitpalooza as Affirm, Roblox, Airbnb, and Wish all filed requests to go public. With DoorDash’s IPO unveiled last week, that’s more than $ 100 billion in free float potential headed for public markets as we head towards the end of a tumultuous 2020.
All of these releases raise a simple question: who made the money? Which VCs entered some of the biggest startups of the decade early? Who’s going to buy a new family yacht for the holidays (or, like, a nice yurt for when Burning Man reboots)? The good news is that wealth is spreading around at least a couple of venture capital firms, although there are certainly a handful of partners who are looking to a very nice check in the mail than others.
So let’s dive in.
I’ve covered in depth the investor returns of DoorDash and Airbnb, so if you want to know more about those individual returns, feel free to check out these analyzes. But let’s take a more panoramic perspective on the returns of these five companies as a whole.
First, let’s take a look at the founders. These are among the best startups ever built, and therefore unsurprisingly, the founders have done quite well for themselves. But there are quite large variations that are interesting to note.
First, Airbnb – by far – has the best return profile for its founders. Brian Chesky, Nathan Blecharczyk and Joe Gebbia together own nearly 42% of their company at the IPO, after raising billions in venture capital. The reason for their success is simple: Airbnb may have had some tough early innings when it was just getting started, but once it did, its rating skyrocketed. This helped limit dilution in its early growth cycles and eventually protected their ownership in the company.
David Baszucki of Roblox and Peter Szulczewski of Wish both did well: they own 12% and approximately 19% of their companies respectively. Szulczewski co-founder Sheng “Danny” Zhang, who is Wish’s CTO, owns 4.9%. Eric Cassel, the co-founder of Roblox, did not disclose ownership in the company’s S-1 filing, indicating he does not own more than 5% (the SEC reporting threshold).
DoorDash’s the founders own a little less of their company, mainly due to the money-eating nature of that business and the huge number of co-founders of the company. CEO Tony Xu owns 5.2% while his two co-founders Andy Fang and Stanley Tang each have 4.7%. A fourth co-founder, Evan Moore, did not disclose the totals of his stake in the company’s filing.
Finally, we have Affirm . Affirm did not provide the full share count for the company, so it is difficult at this time to get a complete picture of the property. It’s also particularly difficult because Max Levchin, who founded Affirm, was a well-known multi-time entrepreneur who had a unique equity structure from the start (many of the venture capital firms on the cap table actually have the same proportions of common stock and privileged). Levchin has more shares combined than any of its single VC investor – 27.5 million shares, compared to the second largest investor, Jasmine Ventures (a unit of the GIC of Singapore) at 22 million shares.