Tag Archives: Equity

nVidia, the new giant

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nVidia has made the headlines recently as its stock value jumped by 25% to reach a valuation close to $1T ($1’000B) joining a small club of companies generally called the GAFA(M) or BigTech. I knew nVidia as just another Silicon Valley success story, a big one, but just one more. It belongs to my 800+ startup list and here is my typical cap. table.

Nvidia was founded in 1993 by Jen-Hsun “Jensen” Huang, Curtis Priem, and Chris Malachowsky and is headquartered in Santa Clara, California.


There would be so many little things to mention about how typical it is, but here are a few:
– The founders were young engineers (29, 33 and 33), one from Stanford University, the two others from solid even if lesser known schools. One is of Taiwenese origin. They worked in big tech companies before founding their startup, and they are still leading it. They had equal ownership at foundation.
– There was a typical support of venture capital, a total of $20M in 4 rounds between 1993 (the foundation) and 1997 (the IPO), followed by an IPO in 1999, less than 6 years after the incorporation. The VCs were Sequoia (which also funded Apple and Google), and Sutter Hill. The board included experts from Synopsys (its cofounder) and Avid.
– Employees owned at least 20% of the company through stock options (and maybe even 35%+ throug additional common shares).
– It went public at a $500M valuation, more than decent and was a leader in computer graphics chips until nVidia applied its technology to AI. Hence its current popularity.

Equal ownership of founders in startups ?

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Yesterday I had a short debate about Wozniak and Jobs initial ownership in Apple Computer. It is true that at the IPO Wozniak had much less ownership than Jobs, but this can be explained by the fact that he gave or sold at a low price shares to employees (whom he thought deserved it and Jobs did not). But at the origin, they had equal shares as the extract from the prospectus shows.

So I thought of having a look at my startup database (currently having 890 cap. tables) and I studied the numbers. Here they are:

So what are the lessons?

First majority of startup have between 1 and 3 founders, and 1 founder (contrarily to intuition maybe) is not so rare. Now there is a caveat: the history of a startup is never fully known. Apple had initially (and for 2 weeks) 3 founders! The third one was Ronald Wayne

Second, equal ownership is not the majority but it is not rare. Around 15-20%.

But this does not mean, one founder owns more than 50%. Of course yes with 2 founders. But for 3 founders, this happpens in 41% of the cases. When more than 3 founders, this is 31% of the cases. I did not check (yet) if geography or fields of activities have an impact…

Finally, if you read this blog, you should know that statistics do not say it all. Startups are a world of exceptions (and the statistics are seldom Gaussian but follow a power low, so beware of means of %). Therefore more anecdotally, but still important, here are some famous examples:

Famous startups – 2 founders with equal shares
Adobe
Akamai
Apple
Atlassian
Broadcom
Cisco
Genentech
Google
Intel
Netscape
Riverbed
Skype
Soitec
Spotify
Tivo
Yahoo
Zalando

Famous startups – 3 founders with equal shares
Airbnb
Checkpoint
Compaq
DoubleClick
Equinix
Marimba
nVidia
Palantir
Revolut
RPX
WeWork

Famous startups – 3+ founders with equal shares
AMD
Regulus
ROLM
Xiaomi

Famous startups – founders with non-equal shares
Cypress
DropBox
Etrade
Eventbrite
Facebook
Lyft
Microsoft
Mysql
Oracle
Pinterest
Salesforce
Sun Microsystems
Twitter
Uber

More (interesting?) data about French unicorns

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A month ago, I published data about French startups. I had been surprised to discover that access to data about private companies was finally possible for free in my dear country. So I looked at some (famous) French unicorns with an interest in the shareholder structure and how much money they had raised overall, as well as in their seed and A rounds. You will find the detailed information in a pdf in the bottom of the post.

But before moving on to this analysis, I want to mention an excellent article on seed fundraising, which gives advice and quite rich information. It is in French though and is entitled La levée de fonds seed ou amorçage. So here are the results:

In this first table, I just had a look at their age and fund raising. To give simple rule of thumbs, about the ones which are still private, they are about 5 to 15 years old, they have raised about €200M, with seed rounds of €0.5M and A round of €2-3M. The market capitalization should be (by definition) above one billion euros, but apparently this is not always the case (let us say that the value of a private company is a very volatile metric!) and the ratio of this value to amount raised seems also to be 5 to 15…

I then looked at how much dilution the seed and A rounds correspond to as well as the age of the companies for these rounds. Again, not taking outliers into account, both the seed and A rounds seem to induce a 25% dilution, therefore, with rounds of €0.5M and €2-3M respectively, the value at seed is about €2M and at A round is €8-12M. Finally the startups are less than 1-2 years old at seed and less than 4 years old at A round.

The last table is about the shareholding or equity structure as well as some data about the founders. The founders keep 25-30% of their startups, investors have 60-65% whereas employees have 5-10%.

There are about two founders per startup, they are surprisingly often below 30 with a median and average age of 29 and sadly with not a single woman.

Equity List – French Unicorns

Updated data in equity of 800 (former) startups

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As you might know, I regularly compile capitalization tables from companies which filed to go public or were acquired with shareholder data. The last time I published posts about it was in April 2020 with 600+ such tables. I have now more than 800.

I just posted two articles using these updated data:
– The age of founders and non-founding CEOs on August 4,
https://www.startup-book.com/2021/08/04/the-age-of-founders-and-non-founding-ceos/.
– Employee ownership in startups – The stock option millionaire on August 6, https://www.startup-book.com/2021/08/06/employee-ownership-in-startups-the-stock-option-millionaire/.

The content is as follows:
– Individual cap tables: pages 8-834.
– Updated statistics: pages 835-850.
– Table of content: pages 851-860.

I do not plan to do a new analysis. The one with 600 was rich enough I think. Still the individual cap table are available here:
Equity List 800 Startups – Lebret – Aug2021

or on Scribd but you might need an account to fully benefit from them.

Here is the link to the document or to more similar ones on my Scribd account.

Employee ownership in startups – The stock option millionaire

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August is a good month to look back at data and previous posts. I just published one about the age of founders. Here is a quick look again about what employees may gain in startups when succesful. In addition to hopefully what they do with more pleasure than in big established companies, they usually have access to stock options and one of the myths of Silicon Valley is that in the most succesful startups, everyone becomes a millionaire.

A few years ago, I published some data about employee onwernship based on 600 startups. Have a look here. I also commented a guide about stock options in Rewarding Talent – A guide to stock options for European entrepreneurs by Index Ventures.

So how much ownership an employee have in a startup. I looked at my 800-startup database, and built the following tables. Please go to the end of the post for another analysis.

The three tables show some nuances depending upon the field, geography and period but with an ownership around 0.1%, yes employees are close to being millionaires. Now as the next table show, the situation might be different depending who you are in the company from a manager to a junior.

This last table is an extended version from the one used in the presentation I make about equity sharing in startups:

23andMe goes public (IPO) through a SPAC

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DNA testing 23andMe, Anne Wojcicki‘s startup, just went public through a SPAC, Virgin Group Acquisition Company (VGAC) of Richard Branson.

So what is a SPAC? It took me some time to understand and I am still not sure about the details… If you are interested about general information, you may want to read the Wikipedia link below or the following articles:
– OK, What’s a SPAC? from the New York Times, Feb. 2021 or
– The Pied Piper of SPACs from the New Yorker, June 2021.

A standard IPO is a process where a private company becomes public by offering its existing shares for sale to the public with the possibility of creating new shares bought by the public at the IPO.

A SPAC (Special Purpose Acquisition Company as explained on Wikipedia) is a process where an empty shell or “blank check” company is created by raising money on a public stock exchange, it becomes a public company with no activity and just new shareholders. Then it may acquire an existing private company by a negociation where the existing shareholders of the SPAC and of the private company agree on a balanced value between the two companies. By this reverse merger company, the private company becomes the public company and the SPAC name disappears.

So 23andMe followed such a process and I understood the following to build the cap. table of the new public company. VGAC, the SAPC, had raised $509M at IPO in October 2020. Then Richard Branson proposed to Anne Wojcicki to acquire 23andMe. It worked and they agreed on a price per share of $10, so that the $509M would give 50.9M shares to the VGAC shareholders.

23andMe had its own shareholders, including Anne Wojcicki (about 100M shares), Sequoia (24M shares), Glaxo (39M shares). There were shares detained by managers and board memebers and about 28M stock options too. (The two other cofounders are not mentioned in the IPO document.)

What makes it a little more complex is the additional fact that there was an “private placement” at the IPO of $250M at $10 per share, i. e. 25 new shares in the cap. table.

I am not full sure about all this. It could be that I am mixing the Private Placement, the SPAC shareholders and the 23andMe shareholders, but in a way this is a detail. Where I am confused is that the press annouces a value of $3.9B and I obtain $4.9B which the stock options are not sufficient to explain… Please react if you see a good explanation!

Coursera files to go public (#750)

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After Deliveroo yesterday, here is Coursera’s cap. table. It’s #750 in my long list of startups (see here my most recent analysis – data about 700+ startups).

Coursera and Udacity are probably the most famous MOOCS companies and I could not be surprised if they contributed to create the edtech category. Coursera just filed to go public on Nasdaq so its numbers are available.

Revenues of $293M, with a loss of $66 million in 2020. A lot of venture capital since its foundation in 2011, $464M in total from Kleiner Perkins (and legendary partner John Doerr, and NEA.

Founded by two Stanford professors, specialists of artificial intelligence, Daphne Koller and Andrew Ng, age 43 and 34 at the time of foundation. They are not managing the company anymore. No information about Koller’s shareholding probably because she owns less than 5% of the company and has no executive role.


Coursera founders Andrew Ng and Daphne Koller are computer science professors at Stanford University

Source : NPR

Deliveroo plans to go public

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There was a lot of buzz today about Deliveroo announcing its IPO soon. By the way Coursera, the edtech company just announced it too and I will post about it next. So I had to build its cap. table and thanks to the openness of the British register of companies, I could do it (at least partially) even before the company filed its IPO document.

Interesting data I think about the company growth, its funding and the founders stakeholding. £1.3B invested to cover £1.1B loss, 2’500 employees in 2019 and £1.2B revenues in 2020. Among the best European VCs (Index, Accel) plus Amazon, Fidelity, DST, T.Rowe Price as late stage investors. What else?

PS (March 19): a former colleague mentioned an article saying that early investors would have made “60’000 per cent return” on their investement. At the same time, I discovered about Coupang in South Korea which looked similar to Deliveroo. So I also checked the multiple return for seed investors in Coupang. Here is first its cap. table.

So for Coupang, the initial price per share was $0.02, and I assumed a $35 at IPO, which makes a 1750x multiple.

For Deliveroo, I assume a price per share of £900 with a series A price at £8.36. It is true there were also seed shares at £1,5. This would be a 600x (or 60’000 per cent, not an annuela return though)

So Coupang is even better than Deliveroo…

Airbnb files to go public – the last giant?

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Airbnb just filed to go public. Finally! It maybe the last IPO of the recent giants (and not the latest only), these giants which emerged in the 21st century, such as

and of course is the cap.table, not that far from what I had tried to guess in 2017 in www.startup-book.com/2017/03/13/what-is-the-equity-structure-of-uber-and-airbnb/