You can’t induce 500 million friends without making a few enemies. So travels the tagline of the The Social Network , summing up the tension between Facebook CEO Mark Zuckerberg and his cofounder( and at one point, close friend) Eduardo Saverin, who got booted from the company on its way to world domination.
But Snap Inc ., Facebook’s rival with fewer pals, also has a similar persona in its past: Reggie Brown, one of cofounders Evan Spiegel and Bobby Murphy’s classmates at Stanford where they originally built the app. Brown was apparently forced out of the company without equitydespite, according to Brown, comes real with the concept of the vanishing messaging app.
Brown afterwards, like Saverin, sued. And on Thursday, with Snapchat’s filing to go public, we learned a brand-new detailed descriptions of the story: Spiegel and Murphy paid Brown $ 157.5 million in a colonization over the dispute.
The IPO filing exposes both the settlement’s timeline and financial terms 😛 TAGEND
In February 2013, private individuals filed an activity against us, our predecessor entity and two of our officers in Los Angeles Superior Court, alleging that we were employing certain intellectual property rights that private individuals collectively owned with our founders.
In September 2014, the parties entered into a licensing agreement that resolved all pretensions among the parties. Under the agreement, we agreed to pay the individual a total of $157.5 million and such amounts were recorded in 2014. We paid private individuals $50.0 million in 2014. As of December 31, 2015, $107.5 million be listed in accrued overheads and other current liabilities on the consolidated balance sheet. We paid the individual $107.5 million in the year ended December3 1, 2016.
There are no further sums required to be paid in the future.
A TechCrunch report from March 2012 saw an anonymous source who backed up Brown’s claim that he had invented the notion of Snapchat.
Spiegel wasnt even part of the convo at the ideas inception, the source told TechCrunch.
“Brown stated to Spiegel something to the effect of: ‘we should make an application that transmits deleting illustration contents, ‘” according to the 2013 lawsuit. “Spiegel acknowledged the commercial-grade viability of Brown’s idea, repeatedly uttering that Brown had indeed conceived of a ‘million-dollar idea.'”
Turns out it wasn’t only a “million-dollar idea.” Snapchat’s now striving a its evaluation of more than $20 billion.
And Brown, much like the images that Snapchat trades in, was himself made to vanish, too.
According to TechCrunch , Brown graduated from Stanford in June 2012 and moved back to South Carolina, where he grew up. Meanwhile, Spiegel’s gracing magazine handles, as he and Murphy continue their nice guy narrative.
The IPO filing also exposed that the cofounders developed a Snap Foundation to “support arts, education and youth.” Each founder promised to donate as much as 13 million shares of common stock over the next 20 years.