- Slack, the workplace messaging app, is now a public company, in one of the most anticipated multi-billion IPOs of the year.
- Some of the company’s early investors have stakes worth billions, and many employees have shares worth millions.
- Here are the people and investors who stand to make the most.
- Visit Business Insider’s homepage for more stories.
As of Thursday, June 20, Slack is now a public company.
The stock price jumped immediately from an initial price of $US26 to as high as $US42. Shares are trading now at about $US40 and giving the company a valuation of over $US20 billion.
As is customary, the day before its public offering, Slack released an updated prospectus that gave us an updated view of the company’s financials and top investors.
As is typical these days, Slack is using a two-tier structure where it sells Class A shares to the public, with each of those shares offering one vote per share; and it has Class B shares that come with 10 votes per share.
But Slack’s power structure has a twist. Normally the super-voting shares are held by founders as a way to keep tight-fisted control after their company goes public. In Slack’s case, all of its major shareholders will get the Class B shares that provide 10-votes-per share, its paperwork shows. This includes the company’s founders, as well as the major investors, board members, and named executives – that’s 12 executives in all, the paperwork says.
Each share of Class B common stock can be converted at any time into a share of Class A common stock, should the owner want to sell shares.
We used a price of $US40/share to calculate the rough value of the stakes owned by Slack’s major shareholders.
Take a look:
Founder CEO Stewart Butterfield: $US1.7 billion.
Stewart Butterfield is the CEO co-founder and chairman of Slack.
He previously founded Flickr and sold it to Yahoo, reportedly for around $US22 million.
After Flickr, he and his cofounders launched a gaming company and they built their own chat tool to help them work on it. The game never took off, but that chat tool became Slack.
Butterfield is the single largest individual share owner with over 42.5 million shares, or 8.4% of the company. At $US40/share his stake is worth over $US1.7 billion.
He has also registered 11,048,386 shares as Class A shares, meaning they are ready to be sold on Day 1 as a public company. If he sells them all at $US40/share, he can pocket a cool $US442 million.
Founder CTO Cal Henderson: $US672 million
Cal Henderson is the cofounder and CTO of Slack.
He met Butterfield before Flickr was created back when Flickr was also trying to be a gaming company. He helped Butterfield create a photo-sharing service to pay the bills while they worked on the game.
When Butterfield launched another gaming company, Henderson was in. This time they built a wildly successful chat app.
Henderson owns nearly 16.8 million shares. At $US40/share his stake would be worth over $US672 million.
He registered 4,378,441 shares as Class A, ready to be immediately sold. If he sold them for $US40/share, he would pocket over $US175 million.
Accel’s Andrew Braccia: $US4.8 billion
The success of Slack is a major feather in the cap of Accel partner Andrew Braccia. Braccia invested in Slack during its $US1.5 million seed round and bought more shares as the company sold them. (Slack has raised a total of $US1.22 billion from venture investors over the years.)
Accel is currently Slack’s largest shareholder, with a 24% stake in the company, and it stands to make a lot of profit. It bought series A shares at $US2.85 a share, according to Pitchbook.
Accel’s owns nearly 120 million shares. At $US40/share, that stake is worth nearly $US4.8 billion.
Accel registered 29,982,103 shares as Class A. If it sold them all at $US40 share, it would rake in nearly $US1.2 billion.
Andreessen Horowitz’s John O’Farrell and Marc Andreessen: $US2.7 billion
Marc Andreessen and his venture firm Andreessen Horowitz also bought into Slack during the seed stage and increased its stake as Slack raised more money.
Currently, A16z partner John O’Farrell is also a Slack board member, although Slack says he doesn’t have voting control over A16z’s shares and so Slack has named him an independent board member. (O’Farrell’s son also works as an engineer at Slack, since 2017.)
Back in 2014, when the very young Slack first starting going viral and Andreessen tweeted out a chart of its growth, saying “I have never seen a viral enterprise app take off like this before – all word of mouth.”
Slack kept growing from there.
Andreessen Horowitz’s owns nearly 67 million shares and is the second-largest shareholder, with 13% voting power. At $US40/share that stake would be worth nearly $US2.7 billion.
It registered 16,630,831 shares as Class A. If it could get $US40 for all of them, it would pocket over $US665 million.
Social Capital’s Chamath Palihapitiya: $US2 billion
Slack’s success is a much-needed booster shot for Chamath Palihapitiya and the venture firm he founded Social Capital.
Social Capital melted down last year, with a wave of partners leaving, after Palihapitiya launched an avant garde method of automatically funding startups using metrics and algorithms.
Palihapitiya originally made his money as an early employee at Facebook, though as a VC he’s done well backing companies like Box, SurveyMonkey and Yammer.
He plowed his own money into Social Capital as one of its major investors, so Slack’s payday should benefit him handsomely.
Social Capital owns nearly 51 million shares and is the third-largest shareholder. At $US40/share that stake would be worth over $US2 billion.
Social Capital registered 12,713,341 as Class A. If sold for $US40/share, that’s nearly $US509 million.
SoftBank’s Ruwan Weerasekera: $US5.9 billion
Japanese investment powerhouse Softbank Vision Fund first bought into Slack in 2017, after the company had already become successful, as part of a huge $US250 million venture round.
Those shares are managed by SoftBank’s COO Ruwan Weerasekera.
It bought into other rounds as well and now owns nearly 37 million shares, or 7.3% of the company. At $US40/share that stake is worth nearly $US5.9 billion.
Softbank registered 2,245,638 shares as Class A. If it sold those shares alone at $US40/share, it would pocket nearly $US90 million.
Slack CFO Allen Shim: $US110 million
Allen Shim joined Slack in 2014 as the senior VP of finance and was promoted to CFO in 2018.
This turned into a bigger job than he could possibly have imagined back in 2014 because Slack is going public in a direct listing, meaning it didn’t hire a bunch of bankers to run the IPO.
Shim’s stake is over 2.7 million shares, which, at $US40/share, would be worth nearly $US110 million.
He registered 1,322,706 million, about half is stake, as Class A. If he got $US40 each for them, he would pocket nearly $US53 million.
Slack Head of sales Robert Frati: $US23 million
Robert Frati is Slack’s senior VP of Sales and Customer Success. He joined the company in 2016 after a decade at Salesforce.
Frati was the highest paid exec at Slack in 2019, with a base salary of $US450,000, compared to Butterfield’s $US430,000. (He also earned double Butterfield’s cash bonus.)
He owns 564,935 shares of Class B stock. At $US40 per share, is stake is worth nearly $US23 million.
The docments show that he also registered 635,565 shares as Class A. If he got $US40/share, for those shares, that’s over $US25 million.
Slack General Counsel David Schellhase: $US20 million
David Schellhase is Slack’s General Counsel and secretary who joined the company at the end of 2016.
He’s working especially hard with this public offering because it’s a direct listing, not a more traditional IPO.
He’s got 508,670 Class B shares. At $US40/share they would be worth over $US20 million. He also registered 573,312 shares at Class A. Should he sell them all at $US40/share, that’s nearly $US23 million.
Slack board member Sarah Friar: $US16 million
Sarah Friar, the CEO of Nextdoor and former CFO of Square, joined Slack’s board of directors in 2017.
She has 406,017 of Class B shares. At $US40/share they are worth over $US16 million. She registered 50,752 shares as Class A. Should she sell those Class A shares at $US40/share, she’d bring in over $US2 million.
Slack board member Edith Cooper: $US11 million
Edith Cooper is a board member who joined Slack in 2018. She was famously the head of HR for banker Goldman Sachs, a post she left in 2017.
Cooper has a total of 273,428 restricted stock units available to her, though Slack says her vested stake is 85,446 shares. At $US40/share, her total shares are worth nearly $US11 million.
She’s registered 102,535 shares as Class A. Should she get $US40/share for all of them, that’s just over $US4 million.
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