Snapchat Is Mulling Another Huge Round at a $3.5 Billion Valuation

Re:Snapchat Is Mulling Another Huge Round at a $3.5 Billion ... by pud on Friday October 25, 2013 @03:32PM (#6613966)

The purpose of these big rounds, usually, is founder liquidity.

Snapchat could easily get acquired, making the founders (and early employees) very rich.

But investors don't want them to sell yet. So investors buy a lot of common stock (from founders/employees) at a big valuation, making the founders (aka the only board members who aren't already rich) rich, so that the founders are less interested in selling.

Some of the money goes to the company. But it's not usual for 20-25% of big rounds to go to founders/early employees.

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Re:Snapchat Is Mulling Another Huge Round at a $3.5 Billion ... by pkfrank on Friday October 25, 2013 @03:44PM (#6614043)

Thanks for this comment. It frames the valuation in a way that actually makes some semblance of sense.

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Re:Snapchat Is Mulling Another Huge Round at a $3.5 Billion ... by jerrypo on Friday October 25, 2013 @03:52PM (#6614093)

Great insight pud, puts these crazy valuations into perspective.

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Re:Snapchat Is Mulling Another Huge Round at a $3.5 Billion ... by mh- on Friday October 25, 2013 @08:47PM (#6615705)

great insight from someone who knows an F'd Company when he sees one. ;)

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Re:Snapchat Is Mulling Another Huge Round at a $3.5 Billion ... by taurussai on Friday October 25, 2013 @11:45PM (#6616220)

Doesn't founder liquidity typically range swap out some equity for single digit million dollars?

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