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Snap's Investors Will Make A Lot Of Money In An IPO

Snap's Investors Will Make A Lot Of Money In An IPO

Evan Spiegel had an offer on the table to sell his company, Snapchat, to Facebook Inc (NASDAQ: FB) in 2013 for $3 billion.

Spiegel refused the offer and felt he could grow the social media company, now called Snap, over the years. His decision proved to be the right one and many of his backers and investors owe him a big thanks because they will soon be very rich.

According to CNBC, Spiegel and Snap's co-founder Bobby Murphy each own a stake in the company valued at $4 billion based on Snap's entire business being valued at $25 billion. The company's largest institutional investor is Benchmark which owns a 12 percent stake valued at around $3 billion.

Related Link: Snapchat Changes Its Name, Enters The Hardware Space

Benchmark was the lead investor in Snap's Series-A round, in which it raised $13.5 million at a $70 million valuation back in February 2013.

Lightspeed Venture Partners owns around 8 percent and Institutional Venture Partners owns around 5 percent.

CNBC noted that only six venture-backed tech companies have gone public in 2016, which means venture capital firms are sitting on large paper gains but little actual dollars to return to their limited partners.

In fact, Benchmark's initial investment is now worth 300 times its original value, which will mark one of the firm's top returns of all time.

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