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THE LONG CON: How Reddit's founders took their company back #reddit #tech #startups #stockmarket

March 05, 2024 / 01:00

This episode discusses the history of Reddit's sale and eventual spin-off from Conde Nast, focusing on key figures and strategic decisions involved.

The conversation centers around a post by Yesan, a former CEO of Reddit, who outlines the company's early struggles after being sold for only $10 million shortly after its launch.

Yesan explains how the founders recognized their mistake and devised a plan to persuade Conde Nast to spin Reddit back out. They recruited a new CEO who demanded options in Reddit, which led to the creation of a separate cap table.

Eventually, they brought in outside investor Sam Altman, which helped solidify their strategy. The episode highlights how this plan ultimately succeeded, allowing Reddit to become a multi-billion dollar company.

TLDR

Reddit's spin-off from Conde Nast involved strategic moves by founders and CEO Sam Altman.

Episode

1:00

00:00:00

this was a post by yesan who is a former CEO of Reddit that was published back in

00:00:04

I think 2015 he kind of lays out what I think happened Reddit was sold for only about $10 million a year after it

00:00:10

launched so like really really small and I think that it kept growing and the founders realized maybe that made a

00:00:16

mistake so they started scheming on how to get Connie Nas to spin it back out so

00:00:20

Yan lays out the steps they went through they recruited a CEO then they had that

00:00:25

CEO demand options specifically in Reddit from Ki Nast which meant that Connie Nas had to create a separate cap

00:00:32

table for it and then once they had a separate cap table then they could sort of pressure to have like an outside

00:00:37

investor bought in for the expertise that just happened to be Sam Alman eventually step by step they worked it

00:00:43

to the point where they got Connie n to spin off the company and I guess this plan worked it should be said that the

00:00:48

largest shareholder in Reddit according to the S1 is Kias parent company it was smart for conas to do the spin out and

00:00:55

give up 70% to have 30% of what's going to be a multi-billion dollar IPO

Episode Highlights

Reddit's Humble Beginnings
Reddit was sold for only $10 million a year after its launch, a surprising low valuation.
“Reddit was sold for only about $10 million a year after it launched.”
@ 00m 06s
March 05, 2024
The Spin-Out Strategy
The founders devised a plan to spin Reddit back out from Connie Nas, leading to its growth.
“They started scheming on how to get Connie Nas to spin it back out.”
@ 00m 16s
March 05, 2024

Episode Quotes

It should be said that the largest shareholder in Reddit is Kias parent company.
THE LONG CON: How Reddit's founders took their company back #reddit #tech #startups #stockmarket
Smart for conas to do the spin out and give up 70% for 30%.
THE LONG CON: How Reddit's founders took their company back #reddit #tech #startups #stockmarket

Key Moments

Reddit's Sale00:06
Founders' Realization00:14
CEO Recruitment00:22
Spin-Off Success00:46