In light of the flurry of VC-backed technology company IPO filings this year, one of the more interesting data points was the beneficial equity ownership of the co-founder(s) (e.g. what percentage of the business did they own).
Here are a few data points on founder equity ownership at time of IPO:
- ExactTarget co-founder – 3.8%
- Yelp co-founder – 11.1%
- Guidewire co-founders – 3.9% and 5.1%
- Bazaarvoice founder – 14.3%
- Eloqua co-founder – 5.5%
- Jive co-founders – 15.8% and 15.8%
Now this doesn’t take into account founders that cash out some of their equity prior to IPO, which isn’t common but is noted in the ExactTarget S-1 (~$5 million). But, it appears that on average for venture-backed companies that reach an IPO, founders typically have between 4% and 15% of the equity (note that Marc Benioff of salesforce.com had over 30% of the equity at the time of IPO: source).
What else? What are your thoughts on the percentage of ownership founders have at time of IPO?