Snapchat CEO Evan Siegel Says Ousted Co-Founder “Deserves Something.”
Snapchat founders Evan Spiegel and Bobby Murphy are being sued by ousted co-founder Reggie Brown. Spiegel acknowledged that Brown came up with the idea behind Snapchat, but he ultimately decided that Brown could not handle being a co-founder of the company. Spiegel, Murphy, and Brown were all connected through the Kappa Sigma fraternity at Stanford University.
Brown said that the two other co-founders stole his idea and cut him out of a huge stake in the company. Spiegel and Murphy did not offer alternatives to that story except for dismissing Brown’s claim. This lawsuit sounds very similar to the one that took place between Mark Zuckerberg and the Winklevoss twins, Cameron and Tyler. This will likely have the same ending where Spiegel and Murphy will likely have to pay Brown tens of millions of dollars to settle the lawsuit. After all, Spiegel said that Brown “deserves something” for his role at the company.
BusinessInsider got their hands on the deposition videos where Spiegel acknowledged that Brown “deserves something.” Murphy and Spiegel said that Reggie Brown thought of the idea for the app and took the idea to his frat brother, Spiegel. Spiegel had business experience and was excited by the idea, then pursued it.
The reason why Murphy was pulled into the project was because he knew how to code. Murphy, Spiegel, and Brown worked and lived together for a few months until the product was released. Spiegel and Murphy decided later on to kick Brown out of the company. Before that, the three of them agreed to split the company equity between theme. Spiegel said that he does not recall that conversation though.
Brown wants one-third ownership in the company because that is what Murphy and Spiegel agreed to. It would be difficult for Brown to prove this because it was a verbal agreement. Snapchat’s equity is not limited to just Murphy and Spiegel right now because the company has raised around $73 million in funding from Lightspeed Venture Partners, Benchmark, SV Angel, Institutional Venture Partners, and General Catalyst Partners.