Dropbox’s CEO and its first big institutional investor have amassed an unusually large percentage of the company.
Dropbox, which unveiled its IPO documents on Friday, raised money relatively slowly on its way to its last valuation of $10 billion. What that means is that Drew Houston, one of the company’s founders, and Sequoia Capital, which cut Houston his first venture capital check, now stand to make a disproportionately largely amount of money off their file-sharing and cloud-storage project.
Houston owns 25 percent of the outstanding shares of the company, and his co-founder, Arash Ferdowsi, owns about another 10 percent.
And unlike at companies that raise more than a half-dozen rounds of outside financing before going public, Dropbox only partook in four major venture capital rounds. Fewer total rounds meant fewer new investors to dilute Houston’s and Ferdowsi’s shares.
Sequoia, which led the seed and series A rounds for the company, currently controls 23 percent of the stock. Sequoia is represented on Dropbox’s board by Bryan Schreier.
Those were the two rounds when an investor could buy shares on the cheap — after that, Dropbox’s valuation jumped from $25 million in 2008 to $4 billion just three years later in 2011, according to PitchBook.
To keep that high ownership rate in the company, Sequoia likely aggressively doubled down on its big success during those later financing rounds led by investors like Index and BlackRock.
Yet it was much more expensive to buy into an established success. Neither of those funds own more than five percent of the company today.
Additional reporting by Rani Molla.
This article originally appeared on Recode.net.