How to Turn Down a Billion Dollars: The Snapchat Story

by Billy Gallagher

The lawsuit was also a major distraction to Evan, Bobby, and Snapchat, during a time when they needed to focus more than ever. Finally, they reached a settlement. Reggie would receive $157.5 million and sign a gag order to never speak about Snapchat, the founding, or the lawsuit. Snapchat would acknowledge Reggie’s contributions to the company. Like Facebook’s multiple lawsuits with the Winklevoss twins and Eduardo Saverin, it’s difficult to neatly arrange the characters into winner and loser columns. Reggie Brown likely could not have built Snapchat into the multibillion-dollar company it is today. But he did not simply toss an idea out there for anyone to take—he recruited Evan, the best person he knew for the task, to join him and start the company. So what is fair for each side to receive? Snapchat’s valuation soared so high and so quickly during the lawsuit that it was hard for each side to wrap their heads around it, let alone arbitrate what each side deserved. This question isn’t going away. The Social Network, featuring courtroom scene after courtroom scene of friends hurling accusations at each other through expensive lawyers, spurred scores of young college students to pursue startups. Evan’s massive success with Snapchat has only increased the startup fervor on Stanford’s campus. And Reggie’s lawyers’ firm, Lee Tran & Liang, has become the hot law firm for ousted startup cofounders to sue young tech companies.