SaaS Founder/CEO Equity at Time of IPO

As a followup to the Rich or Royal conversation, there’s another example to highlight: SaaS founder equity at time of IPO. Here are the last nine SaaS IPOs profiled on this blog and the founder/CEO equity percentage at time of filing:

On average, the founder/CEO owned 10.9% of the business at time of IPO. Now, these are some of the most high profile SaaS startups over the past three years and by all measures these founder/CEOs have been tremendously successful. Entrepreneurs would do well to think through the Rich or Royal question and understand the level of dilution that comes from multiple rounds of institutional financing.

What else? What are some more thoughts on the average SaaS founder/CEO equity at time of IPO?

8 thoughts on “SaaS Founder/CEO Equity at Time of IPO

  1. An important one that you left out is Atlassian, where the founders owned 75% (!) at the time of IPO filing. This is definitely more an exception than the rule, but definitely worth looking at.

    1. Atlassian is an unbelievable company but not traditional SaaS (they’re a mix of installed software and SaaS). By having the installed software component they were able to finance the business with upfront license revenue (as opposed to SaaS where the revenue is spread out of the lifetime value of the customer).

      1. True, but could be interesting to see trends over time too (if there are enough datapoints)

    1. Agreed. Part of the rationale for a founder to give up equity is to grow the overall size of the pie. 10% of $100M and 5% of $200M yield the same outcome. Time from founding to IPO would also be an interesting vector as the argument for aggressive funding is usually to dominate a market..

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.