6 tech founders who cashed out early and missed out on billions

Selling a startup for millions at a young age can feel like the ultimate win. Yet walking away with life-changing money does not erase the nagging thought of what might have been had the founders held on longer.

While it is difficult to tell whether their company would thrive without a wealthier parent firm, what is clear is that the choice to sell is among the most consequential decisions an entrepreneur will ever face.

For these tech founders, according to Fortune magazine, cashing out early meant missing out on fortunes that could have been billions of dollars larger.

YouTube’s Steve Chen and Chad Hurley

Chad Hurley (L) and Steve Chen, co-founders of YouTube, pose after a news conference in Paris June 19, 2007. Photo by Reuters

Two decades ago, Jawed Karim stood in front of the elephants at the San Diego Zoo and filmed a 19-second clip talking about their trunks.

That video, titled "Me at the zoo," would become the first video on YouTube, the platform he had co-founded with Steve Chen and Chad Hurley.

Few could have predicted how quickly the site would take off. Within just over a year, its rapid growth drew the attention of Google, which offered US$1.65 billion to acquire the company. The founders, then in their late 20s, accepted the deal.

Filings with the U.S. Securities and Exchange Commission cited by Reuters showed that CEO Hurley at the time received 694,087 Google shares valued at about $326 million. Chen walked away with a similar haul worth $326 million, including 625,366 shares he owned directly and 68,721 placed in a trust.

Karim, who had stepped back early to return to Stanford for graduate studies, received $64 million. Although YouTube still lists Karim as a co-founder, Hurley and Chen often tell a simplified version of the company’s origin that minimizes his role.

Today YouTube is valued at roughly $550 billion, a 333-fold increase since its sale.

Had Hurley and Chen kept the same ownership stakes they held in 2006, each could be worth more than $100 billion today.

Reddit’s Alexis Ohanian and Steve Huffman

Alexis Ohanian (L) and Steve Huffman, co-founders of Reddit. Photo by AFP, Reuters

Reddit began in 2005 with a very different idea. Alexis Ohanian and Steve Huffman originally pitched a food ordering app called "mymobilemenu," but with guidance from startup accelerator Y Combinator, they pivoted to what would become known as the "front page of the internet."

Just a year later, the two founders, then in their early 20s, accepted a $10 million acquisition offer from Condé Nast, as reported by Newsweek.

Following its stock market debut last March, Reddit is now valued at more than $45 billion, or 4,500 times its sale price.

Huffman, who is Reddit’s CEO, held more than 4.1 million shares worth over $200 million around the time of Reddit’s IPO, according to documents filed with the U.S. Securities and Exchange Commission.

Ohanian, however, had long since parted with his ownership after the platform’s 2006 sale and was not listed in the documents among those with more than a 5% stake.

If he had maintained his stake, his fortune would have even eclipsed that of his wife, tennis legend Serena Williams, whose net worth is estimated at $350 million.

Instagram’s Kevin Systrom and Mike Krieger

Instagram founders Mike Krieger (L) and Kevin Systrom attend the 16th annual Webby Awards in New York May, 21 2012. Photo by Reuters

Kevin Systrom and Mike Krieger launched Instagram in October 2010. Less than two years later, Facebook acquired the company for $1 billion in cash and stock.

At the time of the deal, Systrom, who served as chief executive, owned 40% of Instagram and walked away with about $400 million. Krieger, with a 10% stake, received roughly $100 million. The company’s 13 full-time employees also shared nearly $100 million, distributed based on tenure, according to Wired.

Instagram is now valued at around $114 billion, according to Kantar, meaning that both Systrom and Krieger would likely have multibillion-dollar wealth if they had retained their ownership.

The pair left Facebook in 2019, with Systrom later reflecting that sudden wealth had taught him an important lesson.

"I think the biggest lesson ... coming into a fair amount of money pretty quickly, was that money itself is no end. It doesn’t make you happy. It doesn’t solve health problems. It can help in those things," he told TechCrunch at the South by Southwest conference that same year in Austin, Texas.