Just another payday for the Groupon gang
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By John Pletz
June 03, 2011
(Crain's) — Groupon's initial public offering may turn out to be the biggest payday for its founders and other insiders, but it's far from the first.
Founders Eric Lefkofsky, Bradley Keywell and Andrew Mason, along with some early investors in the daily-deal site, pocketed hundreds of millions of dollars in private sales of Groupon stock last year.
The value of their remaining holdings will depend on the per-share price of the IPO. But it's clear those shares will be worth billions.
The numbers show the amount of wealth created in just three years since Groupon's founding. And the share sales reveal the extent to which insiders at hot start-ups can cash in on pre-IPO buzz before the company becomes subject to stock market fluctuations and full-fledged Wall Street scrutiny.
According to the prospectus filed yesterday for the $750-million IPO, Groupon valued its shares at $15.80 for internal purposes in February. The stock could be worth much more if Groupon enjoys the kind of investor interest seen by LinkedIn, another Internet company that saw shares climb 30% en route to its IPO.
At the $15.80 price, Mr. Lefkofsky holds shares worth at least $1 billion. Mr. Lefkofsky, who bankrolled Mr. Mason with $1 million, also pocketed $390 million selling shares to later investors, including New Enterprise Associates Inc. and Starbucks CEO Howard Schultz.
Mr. Lefkofsky, 42, owns the shares through entities jointly held by him and his wife, Elizabeth.
Mr. Keywell, 41, sold $157 million in stock, but still holds $326 million in shares through an entity owned 80% by his wife, Kimberly, and 20% by his children.
Mr. Mason, 30, sold stock worth $27.9 million and still holds shares worth $371 million.
Venture capital fund NEA, a frequent backer of Mr. Lefkofsky's projects and Groupon's first outside investor, sold shares worth $70 million and holds stock worth $691 million.
Accel Partners sold $20 million worth of stock and holds shares worth $262 million.
Others who've cashed out include former board member John Walter. The former CEO of R.R. Donnelley & Sons Co. sold shares worth $28 million.
Kenneth Pelletier, an early Groupon employee who stepped down as chief technology officer in late March, sold shares worth $11 million and still holds stock worth $17 million.
Rob Solomon, who joined Groupon in early 2010 and stepped down as president and chief operating officer in March, cashed in stock options worth $4.9 million and holds options on shares worth $21 million after exercise costs.
Shareholders of CityDeal, a German-based daily-deal company bought by Groupon in May 2010, cashed out $170 million worth of stock and still hold a 10% stake in the company worth $484 million. |
