Snapchat Co-Founders Trade Stock For $10 Million Each
The co-founders of Snapchat, the popular self-destructing photo-messaging app, just pocketed some serious cash.
Co-founders Evan Spiegel and Bobby Murphy each traded personal stock for a reported $10 million in secondary funding, in addition to the $60 million Snapchat raised during a Series B round of venture funding . This put the company at $800 million pre-money valuation, compared to last year’s then-value of $70 million and $500 million valuation. A lot has been accomplished in the course of a year.
These type of swaps are more popular than you think. One investor believes that secondary investments give startup founders proper incentives, telling Valley Wag, “Founders get ‘rich’ now, and de-risk some of the startup. Doesn’t change alignment, just rewards them for their progress so far, and gives them life flexibility and security to focus on building bigger company.”
With the app boasting a user base that snaps more than 200 million pictures and videos on a daily basis, scaling up is on the horizon for Snapchat.
“This is almost all about scaling for us, we’re using the money mostly for server builds and hiring purposes,” Evan Spiegel, co-founder of Snapchat, told AllThingsD in an interview. “We’ve been adding awesome engineers at a nice clip so far, but we were at a place where we weren’t able to innovate as fast as we wanted to. This will let us do that.”
Looks like these Stanford University students have been handsomely rewarded for their hard work.
