23 Yr Old Snapchat CEO Turns Down 3 Billion Offer From FB

Stork said:
sea manup said:
this isnt a once in a lifetime thing for him, if he is able to grow/maintain his business he will have plenty of higher offers in the future
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Exactly. I would have turned it down too. Just wait another 3-4 years....probably 10x that amount :lol: :lol:
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Umm not necessarily, look at Groupon. The bubble might burst on him.

And chill wit that 10x amount. He isn't reaching that, MS bought Skype for 8.5 billion
 
Facebook buying instagram was smart, they was

Headed towards MySpace land had that not

happened.
 
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ninjahood said:
Facebook buying instagram was smart, they was

Headed towards MySpace land had that not

happened.
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Unlike MySpace, Facebook continues to find ways to generate revenue. New algorithm is in testing that gathers data based off of where your cursor moves. MySpace just made an announcement that said without saying that they aren't making money.
 
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Snapchat doesn't have the revenue to command such a high valuation. That's why everyone is saying we're in this tech bubble and it's going to burst harder than it did in the 90s.

I had a discussion on FB (ironically) with my friend about this and we concluded that the only reason to not accept FB's offer is because the founder wants to be the youngest billionaire, beating Zuckerberg and Moskovitz for that title. The founder is already well-off, and money doesn't seem to be his priority at the moment. If that's the case, one of the only things left to obtain is recognition, and nothing will make you more well-known than beating out those two as youngest billionaire.

On top of that, SnapChat is unique in that it's based in Southern California, which isn't exactly known as a haven for tech start-ups. So, if he can somehow hold out and and sell his company and become a billionaire ($3bill for SnapChat doesn't necessarily make the founder a billionaire, they would need to sell for a lot more due to VC share and such), he'll be able to achieve that recognition.
 
I mean I can see the value and reasoning behind the Instagram purchase, but this? Does anyone here actually use this app frequently or is it primarily teenage girls?
 
I agree with those who noted that SnapChat BY FAR has the worst revenue model of any of the "social" tech companies.

He should have fleeced FB for that $3b and ran. Far far away.
 
For $3.5 billion they can have it. I get pissed when the "snapchat team" sends me stuff. Imagine users getting advertisements that way all day.
 
starscream said:
girlslovewaffles said:
Snapchat doesn't have the revenue to command such a high valuation. That's why everyone is saying we're in this tech bubble and it's going to burst harder than it did in the 90s.


I had a discussion on FB (ironically) with my friend about this and we concluded that the only reason to not accept FB's offer is because the founder wants to be the youngest billionaire, beating Zuckerberg and Moskovitz for that title. The founder is already well-off, and money doesn't seem to be his priority at the moment. If that's the case, one of the only things left to obtain is recognition, and nothing will make you more well-known than beating out those two as youngest billionaire.


On top of that, SnapChat is unique in that it's based in Southern California, which isn't exactly known as a haven for tech start-ups. So, if he can somehow hold out and and sell his company and become a billionaire ($3bill for SnapChat doesn't necessarily make the founder a billionaire, they would need to sell for a lot more due to VC share and such), he'll be able to achieve that recognition.
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Definitely a bubble. I love the tech startup industry and all the new products and ideas but unfortunately a lot of them just don't make money. I have a strong dislike for Snapchat because I never saw the novelty in disappearing messages, not to mention all of the snapchats I've seen are selfies. How many different times can you take a picture of your face and send it out?

What you said would make sense. Currently their 3rd cofounder is suing them for ownership, and let's see what kinds of equity they're at right now:

Series A: $13.5M, $70M valuation (higher end to be conservative). 5% equity.
Series B: $80M, $800M valuation. 10% equity.

So that comes out to 15%, round it up to 20% to be safe for ownership controlled by investors, now let's divide the remaining ownership so each cofounder has 40%, since the 3rd cofounder is still out of the picture.

40% of $3B is $1.2M, I feel like he would be pretty damn close to being the youngest billionaire if he sold it at $3M.
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Thanks for offering up the #s. I'm really surprised that investors only hold 15-20% of the company.

I guess at this point, the founders are stretching the rubberband and really testing the limits to how far it'll stretch before it breaks. On the plus side, they cash out at the peak. On the down side, they become Groupon. Honestly, $3bill is such a hard offer to pass up on, especially when you consider the fact that the company has ZERO REVENUE (I read this, can't confirm though).

On a related note, I don't even use SnapChat :lol:
 
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FB already priviously offered 1 billion and now they're at three. No need to settle for 3 when 4 is right around the corner. FB has an idea of what they're doing here since they bought Instagram and must know what value that brings to their profitable fold at this point.
 
DUDE probably has an epic blackmail box. That's why he's not selling. Dude has dirt on the majority of future politicians. Like your congresspeople 15-20 years from now are gonna be regretting thinking that Snapchat was safe for distribution of nudes and stuff. Should have read the user agreement.
 
timbo109 said:
DUDE probably has an epic blackmail box. That's why he's not selling. Dude has dirt on the majority of future politicians. Like your congresspeople 15-20 years from now are gonna be regretting thinking that Snapchat was safe for distribution of nudes and stuff. Should have read the user agreement.
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anthony-weiner-13.jpg
 
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Aren't these all fad apps though? The next snapchat will make the current snapchat be saying the same thing about a declining user base.... Take the money and run... All these house of card apps... These big boys just want the user info and data info associated with an up and comer. You aren't really innovating or changing the world here. Take praise someone wants your crap for 3 billion and run far away.
 
timbo109 said:
DUDE probably has an epic blackmail box. That's why he's not selling. Dude has dirt on the majority of future politicians. Like your congresspeople 15-20 years from now are gonna be regretting thinking that Snapchat was safe for distribution of nudes and stuff. Should have read the user agreement.
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The amount of nudes I've gotten on Snapchat...Jesus.  Girls secretly love showing off their goods so I can only imagine how many have been sent in total.
 
bamez said:
Dude saw how when twitter went public it was worth >>> 

The article even says Twitter now worth $25 billy.

I've never used SnapChat, but articles like this only make the company more public.  Any publicity is good publicity.  People gonna read this who have never heard of snap chat, and say, ballsy move, and possibly check it out
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Twitter will last much longer than SnapChat though; I doubt SnapChat will be a "go public" stock.

Crazy offer to turn down, but I'm thinking he is smart enough and has his reasons.

SnapChat is one of my favorite apps, FWIW.
 
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