Snap cofounders Evan Spiegel and Bobby Murphy will become billionaires overnight when their company goes public at a potential $25 billion valuation.
One person who will not share in their glory is Reggie Brown, who went to Stanford with both men and claimed he came up with Snapchat’s core idea of disappearing photos.
Brown filed a lawsuit against Spiegel and Murphy in 2013 after he was forced out of the company and not given equity. On Thursday, Snap disclosed for the first time that it paid a total of $157.5 million to settle with Brown.
“In February 2013, an individual filed an action against us, our predecessor entity and two of our officers in Los Angeles Superior Court, alleging that we were using certain intellectual property that the individual jointly owned with our founders,” Snap said in its
initial public offering prospectus. “In September 2014, the parties entered into a settlement agreement that resolved all claims among the parties.”
As part of the settlement, Snap said it agreed to pay Brown a total of $157.5 million in cash, $50 million of which was paid in 2014 and $107.5 million of which was paid in 2016. The settlement ended up being much less than the more than $500 million Brown originally asked for.
Brown is not listed in the filing as having a stake of 5% or more in Snap.