On Hopin and Secondary Stock Sales

Rules for thee but not for me.

God give me the grace to raise a billion dollars for my startup, the wisdom to sell 195 million dollars in the secondary market and walk out flush when the startup is finally sold for less than a 100 million.

You know, I get it. Being a founder is hard. It’s hard to take the seed of an idea and see it to fruition. What I don’t get is founders claiming that they are in the trenches, claiming that they don’t have a plan B when they do. When they grant themselves an out that they don’t grant employees because of course employees have to be committed to the cause.

Enter Johnny Boufarhat, The founder of Hopin

Hopin did virtual events and did them really well. Hopin was the perfect startup for Covid during the times of remote working and lockdown. It raised roughly a billion dollars, and had a peak valuation of roughly 8 billion dollars. Then post covid, the startup sold Streamyard(a core component of their stack) for a number roughly in in the 100s of millions.

You would think that no one would come out ahead here maybe apart from VCs who structure deals to get paid first. You would think this is a terrible for everyone who actually worked in the company, but this wasn’t the case.

Johnny Boufarhat, the founder of Hopin sold some of his stake in the secondary market for $195 million dollars. Kudos to him for taking some risk of the table and having life changing wealth.

However employees at startups are typically never allowed to sell shares on the secondary market because this would let them cash out and reduce their motivation. Apparently the above doesn’t apply to founders.