Decoding Windsurf’s Google Acquisition Payout

The acquisition of Windsurf by Google always generates interest, particularly regarding the financial beneficiaries. New details have surfaced, shedding light on how venture capitalists (VCs) and the company’s founders received their payouts from this significant deal.

VCs’ Financial Gains

Venture capital firms played a crucial role in Windsurf’s journey. Understanding their returns provides insight into the investment landscape.

• Early-stage investors often receive a higher multiple on their investment compared to those who invest later.
• Preferred stock agreements typically guarantee VCs a certain return before common stockholders (including founders) receive any payout.
• The specific terms negotiated in the investment agreements dictate the exact distribution waterfall.

Founders’ Share of the Pie

While VCs usually have priority, the founders’ share is a critical aspect.

• Founders commonly hold common stock, which is subordinate to preferred stock held by VCs.
• The founders’ payout depends on the overall valuation of the acquisition and the specific terms outlined in their equity agreements.
• Retention agreements or earn-outs can further incentivize founders to remain with the company post-acquisition.