The only thing more rare than a unicorn is an exited unicorn.
At TechCrunch, we cover a lot of startup financings, but we rarely get the opportunity to cover exits. This week was an exception though, as it was exitpalooza as Affirm, Roblox, Airbnb and Wish all filed to go public. With DoorDash’s IPO filing last week, this is upwards of $100 billion in potential float heading to the public markets as we make our way to the end of a tumultuous 2020.
All those exits raise a simple question — who made the money? Which VCs got in early on some of the biggest startups of the decade? Who is going to be buying a new yacht for the family for the holidays (or, like, a fancy yurt for when Burning Man restarts)? The good news is that the wealth is being spread around at least a couple of VC firms, although there are definitely a handful of partners who are looking at a very, very nice check in the mail compared to others.
So let’s dive in.
I’ve covered DoorDash’s and Airbnb’s investor returns in-depth, so if you want to know more about those individual returns, feel free to check out those analyses. But let’s take a more panoramic perspective of the returns of these five companies as a whole.
First, let’s take a look at the founders. These are among the very best startups ever built, and therefore, unsurprisingly, the founders all did pretty well for themselves. But there are pretty wide variations that are interesting to note.
First, Airbnb — by far — has the best return profile for its founders. Brian Chesky, Nathan Blecharczyk and Joe Gebbia together own nearly 42% of their company at IPO, and that’s after raising billions in venture capital. The reason for their success is simple: Airbnb may have had some tough early innings when it was just getting started, but once it did, its valuation just skyrocketed. That helped to limit dilution in its earlier growth rounds, and ultimately protected their ownership in the company.
David Baszucki of Roblox and Peter Szulczewski of Wish both did well: they own 12% and about 19% of their companies, respectively. Szulczewski’s co-founder Sheng “Danny” Zhang, who is Wish’s CTO, owns 4.9%. Eric Cassel, the co-founder of Roblox, did not disclose ownership in the company’s S-1 filing, indicating that he doesn’t own greater than 5% (the SEC’s reporting threshold).
DoorDash’s founders own a bit less of their company, mostly owing to the money-gobbling nature of that business and the sheer number of co-founders of the company. CEO Tony Xu owns 5.2% while his two co-founders Andy Fang and Stanley Tang each have 4.7%. A fourth co-founder, Evan Moore, didn’t disclose his share totals in the company’s filing.
Finally, we have Affirm. Affirm didn’t provide total share counts for the company, so it’s hard right now to get a full ownership picture. It’s also particularly hard because Max Levchin, who founded Affirm, was a well-known, multi-time entrepreneur who had a unique shareholder structure from the beginning (many of the venture firms on the cap table actually have equal proportions of common and preferred shares). Levchin has more shares all together than any of his individual VC investors — 27.5 million shares, compared to the second largest investor, Jasmine Ventures (a unit of Singapore’s GIC) at 22 million shares.
What are some of these stakes worth? If we use pre-IPO valuations as a benchmark (and of course, all of these companies hope that their valuations will skyrocket on the public markets), these founders are looking at a hell of a payday (who would have thought?).
Again, Airbnb wins the battle here by a long shot — each of its founders are worth somewhere in the range of $2.5 billion to $5 billion (Airbnb’s valuation has skyrocketed and plunged amidst the maelstrom of the pandemic, so it’s a bit harder to set a single pre-IPO price). Peter Szulczewski of Wish is coming right behind, with a stake valued around $2 billion, given the company’s previous valuation.
After that, the DoorDash founders are looking at upwards of $600 million each for their shares, despite their low ownership. Szulczewski’s co-founder Sheng “Danny” Zhang of Wish netted around $550 million, David Baszucki of Roblox comes in around $500 million and Levchin of Affirm around $370 million. Of course, all of these numbers will change dramatically as the public markets determine an actual market price for their shares.
All together then, we’re talking about more than $10 billion of liquidity for founders this week. That’s just amazing.
Now let’s head over to the VCs.
Founders Fund is the big winner, owning meaningful stakes in three of the five companies going public this week. The firm owns 11.6% of Wish ($1.3 billion), $224 million in value in Affirm or so and 5.13% of Airbnb ($920 million – $1.8 billion). In short, it’s looking at a triple slam, and almost $3 billion of returns — and of course, those could jump on the public markets even further.
Sequoia is next, owning 15.84% of Airbnb ($2.8 billion – $5.5 billion) and 18.2% of DoorDash ($2.38 billion). That’s more overall returns than Founders Fund this week, but hey, they only got into two of these high-flying companies with meaningful equity (what losers).
Third, you have DST Global, which made its name way back in the day on Facebook’s IPO. This week, they own 19.2% of Wish ($2.1 billion) and 2.73% of Airbnb ($490 million – $960 million) for some compelling returns. The firm generally comes in at the growth stage, so while it’s a big numerical return, much of its investment is made at the growth stages with large checks, driving its multiple on invested capital lower.
There are more major stakes coming up this week. The SoftBank Vision Fund owns 22.1% of DoorDash ($2.89 billion) and Formation8 (the Joe Lonsdale-founded predecessor to 8VC) owns 14.0% of Wish ($1.57 billion).
So if you are counting, that’s a predicted five VC firms with billion-dollar-plus returns coming in the next few weeks, just based on previous valuations for these companies.
What else do we have? Well, a lot more folks are going to be happy:
- Altos Ventures owns 21.3% of Roblox for $850 million
- GGV Capital owns 7.0% of Wish for $790 million
- Republic Technologies owns 5.0% of Wish for $560 million
- Meritech Capital owns 10.3% of Roblox for $410 million
- Index Ventures owns 9.9% of Roblox for $400 million
- Silver Lake owns just shy of 1% of Airbnb for $175 million – $340 million
- Tiger Global owns 7.3% of Roblox for $290 million
- First Round owns 6.3% of Roblox for $250 million
- Lightspeed is looking at $250 million in Affirm
- Khosla is looking at $185 million in Affirm
- Spark is looking at $120 million in Affirm
- GC is looking at $50-100 million in Airbnb
- Accel is looking at $30-60 million in Airbnb
Yes, yes, yes, that’s a lot of data and numbers, but wow, that’s just a stupefying level of capital returns in just one week.
By my count, that’s 18 firms with pretty substantial returns coming. And remember, this is just what is disclosed in the SEC filings — there may be other firms with smaller percentages that didn’t have to disclose their ownership. At Airbnb and Wish’s valuations, those small percentages are worth bank.
In short, some really colossal winners among founders, and several venture firms walking home with billions of dollars in capital. It just goes to show you — build a multi-decacorn, and a lot of people are going to be happy. Now to go to that yurt store in Palo Alto.
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