Snapchat Lawsuit Details How One Founder Discovered He Had No Equity In The Company — Which Is Now Worth $800 Million

August 1, 2013 Leave a comment

Snapchat Lawsuit Details How One Founder Discovered He Had No Equity In The Company — Which Is Now Worth $800 Million

JIM EDWARDS JUL. 31, 2013, 7:06 PM 3,872 6

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Frank “Reggie” Brown, the ousted third alleged founder of Snapchat, never had equity in the company even though he allegedly came up with the idea for the disappearing messages app, filed for its patent, and had some role in designing the company’s logo, according to Techcrunch. Brown is suing CEO Evan Spiegel and CTO Bobby Murphy for one third of the super-hot company, which is valued at $800 million. The story is complicated, as lawsuits tend to be. Basically, Brown was intimately involved with the founders of Snapchat right at the beginning. How much work he actually did for the company is in dispute.At one point, while Snapchat app was called “Picaboo,” Spiegel and Brown changed the name of a company they owned together from “Future Freshman” to “Toyopa Group.” Brown believed this change gave him equity in the newly named company. In fact, it was just a name-change, the papers claim.

Later, when Brown realized Spiegel and Murphy did not recognize that he had any ownership of the company, he sent them this email (below), which details a fight between the three, ending when Brown’s internal passwords were changed — locking him out of the company.

At that point, Brown talked to a lawyer and discovered that his early involvement, and the patent filing, gave him a claim to a third of the equity in Snapchat.

The other founders seem to regard him as a former employee to whom they made no such promises.

Filed under Life, TMT Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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