Chris Sacca, Snapchat and the one that got away!

Every successful investor has an outstanding opportunity which came their way and for one reason or another they did not take it up. Chris Sacca is the founder of Lowercase Capital LLC and a man said to be worth in excess of $1.2 billion. So, while he’s not short of a bob or two, he now deeply regrets not answering an email back in 2012 from the founders of Snapchat!

An invitation to climb on board

Bobby Murphy, the CTO of Snap, contacted Silicon Valley investor Chris Sacca back in 2012 asking his advice about a possible office move and his plans for Snap, which is the parent company of Snapchat. Sacca acknowledges that he failed to respond to the email and within 12 months the company brought in its first outside investor in the shape of Lightspeed Venture Partners. The company initially invested $485,000 and was a regular contributor in future funding rounds.

Nobody can look into the future.
Snapchat, the one that got away!

Today the company sold 4.6 million shares in Snap raising $79 million and leaving a holding of 82 million shares worth just under $2 billion at today’s first-day trading price. The world of investment is full of ifs and buts but if Chris Sacca had responded to the initial email would he have taken the place of Lightspeed Venture Partners?

The one that got away

The fact that Chris Sacca today tweeted his congratulations to the Snap business team while also mentioning his missed opportunity shows his light-hearted side. When you bear in mind that that missed email could potentially have cost him billions of dollars not all potential investors would have taken such a light-hearted approach.

“I know one person who isn’t getting rich in the Snapchat IPO. Hint: the guy who didn’t reply to his email. Congrats to everyone at $SNAP!”

The reality for somebody working in the business arena, such as Chris Sacca, is that he will receive investment opportunities each day. There is no way on earth he can take all of these opportunities and indeed who was to know that Snapchat would become a $20 billion plus business? The fact that he is worth $1.2 billion suggest that he is not exactly hard up himself!

High-risk seed funding

While Chris Sacca has taken a light-hearted approach to his Snapchat saga it does perfectly illustrate the high risk/potentially higher rewards available to those investors willing to participate in early seed capital fundraising. Nobody has actually calculated the ratio of successes to failures in the world of early seed capital technology companies but only a small percentage ever make it to the big stage. Some will fall by the wayside, some will get taken over and some will trundle along hoping for that one big break which will change their future path.

Those who follow the US IPO market will be aware that Snap shares were listed today and immediately increased by 30% ending the day more than 40% up on their initial $17 float price. This is a phenomenal performance especially when you bear in mind that some experts were suggesting the IPO was at risk when the company scaled back its initial pricing range. The next few weeks will be critical not only for Snap but also the IPO market in general and its appetite for new issues.

Leave a Reply