- Slack, the workplace messaging app, is about to go public in a multi-billion IPO.
- 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.
Slack has released its SEC paperwork to become a public company giving us our first glimpse at its financials and top investors.
As is typical these days, Slack is using a two-tier structure where it will sell Class A shares to the public, with each of those shares offering one vote per share; and it will have 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 stock, its current paperwork shows. This includes the company’s founders, as well as the major investors, board members at the companies executives (12 executives in all, the paperwork says).
All of those Class B stockholders will do well if the IPO goes well.
We don’t know exactly how much money these shareholders stand to make because Slack has not yet priced its Class A shares. We also don’t know if the Class B shares will be valued higher/differently. But, we do know that some employees have been allowed to sell their stock on the private, secondary market ahead of the IPO at $US28 a share, valuing the company at $US17 billion, CNBC reports.
So, just for fun, we used the $US28/share price to calculate the value of the stakes owned by its major shareholders. (We’ll update these numbers after Slack officially announces the price of its shares.)
With all those caveats, here are the people and investors getting rich from Slack’s huge IPO:
Founder CEO Stewart Butterfield
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 43.2 million shares, or 8.6% of the company. At $US28/share his stake would be worth over $US1.2 billion.
Founder CTO Cal Henderson
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 $US28/share his stake would be worth nearly $US470 million.
Accel’s Andrew Braccia
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 $US28/share, that stake would be worth nearly $US3.4 billion.
Andreessen Horowitz’s John O’Farrell and Marc Andreessen
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, the caretaker of this investment is A16z partner John O’Farrell, who is also a Slack board member.
Back in 2014, the very young Slack 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 a roughly 13% stake in Slack. At $US28/share that stake would be worth nearly $US1.9 billion.
Social Capital’s Chamath Palihapitiya
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 $US28/share that stake would be worth over $US1.4 billion.
SoftBank’s Ruwan Weerasekera
Japanese investment powerhouse Softbank Vision Fund first bought into Slack after the company had already become successful, in 2017 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 $US28/share that stake would be worth, just over $US1 billion.
Slack CFO Allen Shim
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 nearly 2.7 million shares, which, at $US28/share, would be worth nearly $US75 million.
Slack Head of sales Robert Frati
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 the other’s cash bonus.)
He owns 494,305 shares. At $US28 per share, his stake would be worth nearly $US14 million.
Slack Head lawyer David Schellhase
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 IPO because it’s a direct listing.
He’s got 444,028 shares. At $US28/share they would be worth over $US12 million.
Slack board member Sarah Friar
Sarah Friar, the CEO of Nextdoor and former CFO of Square, joined Slack’s board of directors in 2017.
She has 406,017 shares (and Slack mentions that there may be 228,385 restricted stock units available to her.) At $US28/share, the 406,017 shares would be worth over $US11 million.
Slack board member Edith Cooper
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 that will be available to her around the time of the IPO is 85,446 shares. At $US28/share, this stake would be worth nearly $US2.4 million
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