Jay Choudhury left work partying with unwitting billionaires. He’d just sold SecureIT, a startup he co-founded with his wife Jyoti in the late ’90s, to Verisign. Maybe the employees had thrown a big party, or spent money on decorations. As Choudhury was leaving, he was calculating the net worth of the attendees.
“That night, I went home and [stock] “I counted how many options they had and multiplied that by the VeriSign stock price, and that’s when I realized there were like 70 or 80 billionaires with stock options,” Choudhury told CNBC’s Make It. “That was impressive,” he added, explaining that he didn’t actually realize how much of a financial benefit selling his startup would bring to his colleagues.
Chaudhry, 65, who is now CEO of cloud security company Zscaler, is a billionaire. But he and his wife spent all of their joint savings when they founded SecureIT, Chaudhry told CNBC. That move, and independence from outside investors, allowed him to give more equity to people within the company, he said.
Choudhury wasn’t the only one who walked away with a bulging wallet when he sold the company in 1998. In the following years, VeriSign’s stock price soared, and more than 70 of the company’s 80 employees became paper millionaires.
Similarly, entrepreneur Mark Cuban recently tweeted that most of his sales went to employee bonuses: The sale of Broadcast.com to Yahoo made Cuban a billionaire and “300 of my 330 employees are now millionaires.”
“That’s true. No company can do it alone,” Cuban told Fortune.
Choudhury agreed, telling CNBC that stock distributions are “a good thing because it lets employees make a difference.” [were] I work day and night.”
But long-term financial success was not a given: VeriSign’s stock price plummeted during the dot-com bubble’s collapse but eventually recovered, making employees’ value rise and fall depending on whether they sold their shares at inopportune times.
But there was a palpable air of excitement throughout the office during the surge. “People were going crazy, because they’d never thought about this much money,” he told CNBC, noting that many employees bought new homes and cars or took time off work. “They were able to do what they wanted.”
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