SaaS Founder Ownership at IPO
The founders of Jfrog owned 24% of the business at IPO. Viant’s founders owned 93% and Datto’s founder owned 15%. Braze’s founders owned only 4% combined. The range of founder ownership at exit/IPO can be quite wide and is dependent on any number of factors, including the ability to command high valuations during fundraising and capital efficiency.
The list below shows founder ownership of the last 120 SaaS companies at IPO. The median level of founders ownership shown is 14% while the average is 19%. Note the ownership is combined for the corresponding founders shown.
A few things to consider:
Bootstrapping. Viant was built with no VC. As a result, the founders own 93% of the business. While it may take longer and be harder, I can promise you the founders of Viant don’t regret the ride.
Small ownership. The founder of Docusign, Thomas Gonser, owned 1.5% of the business when it went public. In instances like these, it’s impossible to tell whether he was diluted down to that figure or sold shares along the way to end up at a lower figure.
VC own 56% on median. Most founders should get used to the fact that if they raise significant capital from VC, then VC will come to own the majority of the company. However, that doesn’t mean they have control, as many of these companies have founders that own a class of stock which still controls voting.
Strategics don’t matter. Of the 120 companies listed, only 19 of them (16%) had a strategic investor. Strategic investors are not critical to any company’s success.
Visit us at blossomstreetventures.com and email me directly at sammy@blossomstreetventures.com. All founders and funds welcome! We invest in companies with run rate revenue of $2mm to $30mm, with year over year growth of 20% to 50%+ depending on revenue. We lead or follow in growth rounds and special situations like inside rounds, small rounds, rushed rounds, corralling investors with our term sheet, bridges, inbetweeners, cap table clean up, and extensions. We can commit in 3 weeks and our check is $1mm to $3mm. Also visit https://blossomstreetventures.com/metrics/ for always up-to-date SaaS metrics.
