With over 110 million daily active users and a market cap of nearly $40 billion, Reddit is a giant in the social media world. But unlike Mark Zuckerberg or Evan Spiegel, Reddit’s cofounders never became billionaires alongside their creation.
That’s because just months after University of Virginia roommates Alexis Ohanian and Steve Huffman launched the company in 2005, they sold it to Condé Nast for just $10 million.
Looking back on how successful the platform is now, it might seem astounding for them to have sold so prematurely —and Ohanian even admitted he was a bit naive. But the then-23-year-old’s life was nothing short of complicated. His girlfriend at the time had fallen into a coma, his dog died, and his mom was diagnosed with terminal brain cancer.
“As a first-time CEO fresh outta college, you’re feeling invulnerable, feeling really good about building this business,” Ohanian recalled to Wired in August. “And then all of these things happen. And in particular when my mom was diagnosed, it really framed mortality for me in a new way.”
Plus, at the time, $10 million also felt life-changing for the young adults. Ohanian had seen Zuckerberg turn down Yahoo’s $1 billion bid for Facebook and thought it was “preposterous” to walk away from that kind of money. For Ohanian, the idea of creating millions in value in a short period of time was more than enough.
“If anything, I was very naive,” Ohanian said. “You have to consider $10 million of value creation in 16 months. When we first got the offer, I’m thinking: It’s been not even a year. This is more money than my parents will earn their entire working lives.”
Ohanian and Huffman have become well off regardless and redefined what success means
Even without billionaire status to their name, Reddit’s founders have nonetheless found new pathways to success.
Huffman eventually returned to Reddit and has led the company as CEO for the past decade. Ohanian, meanwhile, has become a prominent tech investor and advocate for women’s sports.
Beyond money and career milestones, Ohanian has spoken about a new generation of CEOs who don’t regret missed business opportunities as much as missed time with their families. “I wish I’d spent more time with my kids,” he recalled them saying.
“CEOs around me are starting to understand this and want to be amazing leaders, partners, and dads,” he added.
Even Sam Altman, CEO of OpenAI—the world’s most valuable private company—recently echoed that sentiment after becoming a father. “It is the best, most amazing thing ever,” he told Bloomberg. “And it totally rewired all of my priorities.”
The startup dilemma: cash out or hold on?
The Reddit founders’ decision to sell early is far from unique: it’s a familiar crossroads in Silicon Valley, where entrepreneurs must decide between a guaranteed payout or risking it all for potentially far greater rewards.
YouTube is another example. Just over a year after its creation, cofounders Chad Hurley, Steven Chen, and Jawed Karim took an offer from Google to buy out the video sharing platform for $1.65 billion. However, with its valuation today being closer to $550 billion, YouTube has grown some 333x (unadjusted for inflation).
Instagram, too, sold less than two years after its founding. Facebook offered some $114 billion for the photo-sharing app, divided between its two co-founders, Kevin Systrom and Mike Krieger, as well as investors and less than a dozen employees.
And while the payday was substantial, it was not as rewarding for the cofounders as they anticipated.
“I think the biggest lesson… coming into a fair amount of money pretty quickly, was that money itself is no end,” Systrom said at SXSW in 2019. “It doesn’t make you happy. It doesn’t solve health problems. It can help in those things.”
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