Snapchat shocked much of the tech community late last year when a report in the Wall Street Journal revealed that it had turned down a $3 billion cash acquisition offer from Facebook. Now, Snapchat’s CEO has offered an explanation for why he hasn’t sold the company yet.
“There are very few people in the world who get to build a business like this,” Evan Spiegel told Forbes for a cover story profiling the cofounder and CEO, which was published online Monday. “I think trading that for some short-term gain isn’t very interesting.”
That might sound like a standard enough talking point for a founder until you consider just how much the “short-term gain” actually was. Forbes calculates that Spiegel and his cofounder Bobby Murphy would each have received $750 million from the Facebook offer.
The deeper reason for the decision, at least according to the Forbes profile, is that Snapchat’s founders sensed weakness and opportunity.
Facebook CEO Mark Zuckerberg first flew out to meet Spiegel in his hometown at the end of 2012, according to Forbes, and proceeded to try scaring Snapchat’s founders by telling them that Facebook planned to release a nearly identical app a few days later. “It was basically like, ‘We’re going to crush you,'” Spiegel told Forbes about meeting. That app was Facebook Poke, which proved to be a flop.
Zuckerberg paid another visit to the young company the following fall to make his bid to buy it, but by that point Snapchat’s founders felt they had an edge.
Snapchat has since raised another $50 million at a reported $2 billion valuation — less than Facebook’s reported bid, but getting there.