Last week I read a biography about Netflix’s early years, That Will Never Work. In one of my posts, I shared how the Netflix cofounders initially divided ownership between the two of them: about 68% for Reed Hastings and about 30% for Marc Randolph. I also shared in a separate post that Marc gave Reed some of his shares in the company when Reed took over as CEO about a year after the company was founded. Both posts were based on what Marc wrote in the biography.

The last part of the book is about going public in 2002 and the day of the IPO. According to my research, the company’s market capitalization (valuation) when it went public was around $300 million (now, it’s more than 1,300 times more: over $410 billion). I was curious how much of the company each cofounder owned when Netflix went public, so I did some digging. I found the company’s 2002 S-1 Registration Statement it filed so it could go public; what I was looking for is on page 66. Here are the details:

• Reed Hastings owned 20% of the company before the IPO and roughly 15% after it. His 15% stake was worth roughly $45 million.
• Marc Randolph owned roughly 5.5% of the company before the IPO and roughly 4% after it. His 4% stake was worth roughly $12 million.

An interesting data point in the S-1 is that VC firm Technology Crossover Ventures (TCV) owned roughly 43% before the IPO and roughly 34% after it. TCV’s ownership stake can be seen on page 66 of the S-1. It’s under the name of TCV founding partner Jay C. Hoag, who is also on the Netflix board. In the biography, Marc says TCV led the company’s series C in early 1999 with a $6 million check and, in April 2000, ten days before the dot-com bubble burst, invested $40 million. IPO documents (page 61) show that TCV invested another $8.3 million in July 2001 via a promissory note and warrants. After the company went public, TCV’s 34% stake was worth roughly $102 million.

The above isn’t a complete picture of everything that happened between the company’s founding and its IPO. Other financial transactions (such as stock options being issued, founders selling shares via secondary transactions, etc.) likely impacted each founder’s ownership at the time of IPO.

I enjoyed Marc’s description of the early days of Netflix. It was helpful for me to see the data around company ownership at IPO.