- Stitch Fix’s CEO and cofounder, Katrina Lake, has shares worth more than $US250 million following the company’s IPO.
- However, Stitch Fix has another cofounder who has been scrubbed from its history: Erin Flynn.
- Flynn filed a complaint against Lake in 2012, alleging that the cofounder was trying to force her out of the company.
Fashion startup Stitch Fix’s IPO left one cofounder a very wealthy woman, with shares that are reportedly worth more than $US250 million.
However, there’s another cofounder who has been scrubbed from the company’s history and cut off from the $US1.63 billion IPO.
While CEO Katrina Lake has taken on the role as the visible founder and figurehead for the company, Stitch Fix’s regulatory filings show that the company was cofounded by Erin Morrison Flynn, the Wall Street Journal reported.
In 2010, Lake and Flynn started a company called Rack Habit that would later rebrand as Stitch Fix, according to a complaint filed by Flynn. When the pair founded the company, Lake was still in school at Harvard Business School, while Flynn says she ran the business full time without taking a salary.
In a post in Rack Habit’s blog from 2011, Flynn is described as the founder “responsible for making the creative decisions that shape not only rack habit as a company, but also what’s inside the rack habit packages.” In the post, Flynn says she was living her dream as the startup’s cofounder.
“[F]rom day one kat and my mantra has been ‘we are going to do this.’ and we haven’t looked back,” Flynn said.
Flynn originally owned a substantial portion of the company, which raised $US750,000 in seed funding from Baseline Ventures in 2011.
In a complaint filed in 2012, Flynn accused Lake of trying to dilute her shares in the company, a storyline that’s familiar to anyone who knows Facebook’s history or who has watched “The Social Network.” The complaint states that Lake tried to force Flynn out of the company after Flynn had her lawyer talk to Lake about rumoured changes at Stitch Fix.
The case was settled out of court for an unknown amount of money in 2014. Flynn is not mentioned in almost any company records, while Lake has taken on the role of Stitch Fix’s very visible figurehead and CEO.
Lake currently owns roughly 15% of the company, which was valued at $US1.63 billion when it went public on Friday. That means Lake’s share in Stitch Fix is now worth almost $US250 million. Lake also sold one million shares in the IPO, racking up almost $US17 million on Friday morning.
Flynn was not listed as a major shareholder in the company’s regulatory filings.
Neither Stitch Fix nor a lawyer for Flynn immediately returned Business Insider’s request for comment.
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