Entrepreneurs that Got Filthy Rich in 2011
Andrew Mason, GrouponEric Lefkofsky, GrouponReid Hoffman, LinkedIn Jeff Weiner, LinkedInMark Pincus, ZyngaTim and Nina Zagat, ZagatTim Westegren, PandoraBen Barokas and Brian Adams, AdMeldSam Yagan, OkCupidJohn Vechey, PopCap GamesArianna Huffington, The Huffington PostBrian Sharples, HomeAwayLars Dalgaard, SuccessFactors
Mark Zuckerberg isn’t the only entrepreneur good at making bank. Here’s a look at entrepreneurs and investors that got filthy, stupid, absurdly rich in 2011 by cashing out, going public, or getting acquired.
Andrew Mason cashed in on Groupon’s IPO, which raised $700 million, becoming the largest IPO by a U.S. Internet company since Google raised $1.7 billion in 2004. With 45.9 million shares in the company, Mason’s net worth exceeds a billion dollars. Not bad for a 31 year old.
Eric Lefkofsky provided $1 million in seed money to Andrew Mason to develop the idea for the coupon buying site. Just a few years later, Lefkofsky and his wife, who are the biggest shareholders in Groupon (even bigger than Mason), got a bump in their net worth when the Groupon IPO popped. According to Forbes, Lefkofksy is now worth around $4 billion—$3.6 billion of which is from Groupon.
Hoffman co-founded LinkedIn in December 2002, and became a billionaire in May 2011 when LinkedIn went public. His stake in the company pegs his net worth at about $1.8 billion, notwithstanding his stake in Greylock Partners, an investor in LinkedIn.
It pays to be in the right place at the right time. Jeff Weiner had been the CEO of LinkedIn for less than two years when the company went pubic in May 2011. Weiner’s 2.5 percent stake in LinkedIn makes him worth about $200 million dollars.
The Zynga IPO, which raised about $1 billion from the public, will make Mark Pincus Silicon Valley’s next billionaire. According to the company’s prospectus, Pincus will own 112 million shares, or nearly 20 percent of the company’s overall value, which is around $10 billion, which will make him worth about $2 billion.
Tim and Nina Zagat started their restaurant review book company when they were lawyers living in Paris. Three decades later, the family-run business finally cashed out by selling to Google for a sum somewhere between $100-200 million (official terms were not disclosed.) “The deal will most likely mean a lucrative payout for the Zagats,” The New York Times noted in September 2011.
Pandora’s IPO over the summer raised about $235 million in its initial public offering. Though Westergren only owns 2.39 percent of the company, the company’s valuation, at about $4 billion, pegs his net worth at over $100 million.
AdMeld, an online advertising optimization firm (that you’ve probably never heard of) was sold to Google (who else?) in June 2011 for a reported $400 million, earning co-founders Ben Barokas and Brian Adams a nice little pay day.
OkCupid, a free online dating site, was the brainchild of Sam Yagan, who sold the company to Match.com in February for $50 million. Over the summer, Yagan spoke to Inc. about the sale, noting “We felt like it was a chance to give our investors, our employees, and us a great return, and do right by our customers, since Match agreed not to change anything.”
In July 2011, Electronic Arts, the leading publisher of video games, bought the company for $750 million in cash and stock. If PopCap hits certain earnings targets, its owners could reap an additional $550 million. Still, it’s not just about the money, says Vechey. "It's about the legacy of what you created," he says.
The Huffington Post's co-founder and editor-in-chief, Arianna Huffington, started the site with Kenneth Lerer in May 2005 as a news aggregation site similar to the Drudge Report. Six years later, AOL purchased the news service for a cool $315 million.
HomeAway’s IPO in June pegged the company’s value at around $2.15 billion. Sharples sold off about 200,000 shares in the Austin-based online operator of vacation rentals at $25 each, bringing home over $5 million. He still owns 1.15 million shares, putting his stake in the company at about $26 million.
SuccessFactors, one of the world’s largest enterprise software companies, was founded in 2001 by Lars Dalgaard. In early December, software giant SAP had announced it would acquire the company for $40 per share, a deal worth about $3.4 billion.