Instagram CEO Kevin Systrom netted US$400m for selling his two-year-old startup to Facebook for $1bn. That’s according to a report by Wired, which cites sources indicating that Systrom holds 40% of the company he founded — an impressively large chunk for any entrepreneur at the time of exit, let alone one on his first company.
If true, that amounts to a personal windfall for Systrom of $725 000 for every day since the Instagram app launched on 6 October 2010.
Co-founder Mike Krieger holds a 10% stake, according to Wired, which will net him $100m. The rest of the company’s 13 employees will get a portion of a $100m stock option pool, depending on how long each has worked at the company.
Investors will do nicely also. Benchmark Capital, which led Instagram’s $7m first funding round in 2011, has an 18% stake, while Andreessen Horowitz and Baseline Ventures each hold about 10%, Wired reports.
If Instagram’s Sequoia-led $50m second round of funding last week actually closed (we’re still looking for confirmation of this), then those investors essentially doubled their money in under a week, because that round valued Instagram at half the $1bn Facebook is paying for the company this week.
Systrom graduated from Stanford University in 2006 with a BS in management science and engineering, according to Instagram’s executive biography. He interned at Odeo, the start-up laboratory Evan Williams founded after he sold Blogger to Google but before he launched Twitter. Systrom also spent two years at Google before founding Instagram in 2010. — Dylan Tweney, VentureBeat