Reddit Goes Public, And The Biggest Gainer Is Sam Altman, OpenAI’s CEO To Make Millions From IPO
Sam Altman, the CEO of OpenAI, is set to make a fortune when Reddit goes public, thanks to his early and consistent investments in the online forum company since 2014. According to the company’s prospectus, Altman has 9.2% of the voting power before Reddit’s IPO.
Altman, who is reportedly looking to raise trillions for chip development that could support OpenAI’s AI computing needs, backed by Microsoft, has a track record of investing in many startups. Some of his successful bets include Asana, which went public on the NYSE in 2020, and Instacart, which joined Nasdaq in September.
How much cash can Altman pocket?
Reddit current valuation is estimated at around $804 million, according to Reuters. So the former CEO is poised to make almost $362 million.
Altman was the president of Y Combinator, the Silicon Valley accelerator, before he launched OpenAI in 2015, giving him access to many small companies.
Altman led Reddit’s Series B round of $50 million in 2014, after being a daily user of the service for nine years, as he wrote in a blog post.
“Reddit is an example of something that started out looking like a silly toy for wasting time and has become something very interesting,” he wrote.
“It’s been an important community for me over the years—I can find like-minded people that I can’t always find in the real world.”
Altman was a Reddit user even before his 2014 speech
Altman continued to invest in Reddit in 2021, putting $50 million in the Series E round in the first half of the year, and another $10 million in the second half of the year, when the company raised a total of $512 million. Altman’s $50 million investment from the year’s first half had increased in value by 45%.
Altman’s shares of Reddit’s Class A and Class B stock are distributed among five different entities, and they will give him more shares than even Reddit’s CEO Steve Huffman, as per Thursday’s filing. Reddit has not disclosed how many Class A shares it will offer in the IPO.
According to the filing, Altman was a member of Reddit’s board until 2021. Reddit announced in January 2022 that he had resigned.
“Sam was an incredible board member and provided invaluable support and counsel to Reddit and myself over the years,” Huffman said at the time.
“We’re deeply grateful for the impact he made on the company.”
Reddit will also offer shares to some of its users, moderators, or Redditors, as part of the IPO. Altman will likely welcome that.