LinkedIn float set to value founder at $600m

Reid Hoffman, the entrepreneur who founded LinkedIn eight years ago, will have a paper worth of more than $600m when the professional networking website floats on the New York Stock Exchange later this month.

Bankers put a value on Mr Hoffman's 20 per cent stake in the company for the first time yesterday, setting a range within which LinkedIn will sell up to 9 million shares in an initial public offering.

The share sale will value the whole company at between $3.02bn and $3.35bn, significantly higher than the range expected when LinkedIn first filed IPO documents in January. The increase reflects soaring revenues at the company, and soaring investor interest in social networking businesses – most of which still remain private, with hard-to-buy shares.

California-born Mr Hoffman, 43, is an alumnus of the management of PayPal, whose sale to eBay in 2002 made millionaires of several Silicon Valley investors and entrepreneurs. He has since become one of the tech industry's prominent angel investors, funding dozens of technology start-ups, including Zynga, the developer behind the Facebook game Farmville.

Mr Hoffman founded LinkedIn in 2003 and has overseen its growth into a major professional networking organisation with more than 100 million members in more than 200 countries. He still chairs the board, but has handed day-to-day management to Jeffrey Weiner, a former Yahoo executive. Both men will sell $4m of shares in the IPO, according to updated regulatory filings lodged with the US Securities and Exchange Commission yesterday.

Mr Weiner's stake in LinkedIn will be worth $81m if the company's shares price at the top of the $32-$35 range. The share sale is being underwritten by a consortium of banks led by Morgan Stanley, BofA Merrill Lynch and JP Morgan, which are expected to finalise the sale price on 18 May.

As well as many of the senior executive team, early investors including Goldman Sachs, Bain Capital and publisher McGraw-Hill are selling shares. More than half the shares on offer are new shares, however, which the company says will be used to expand the business, perhaps by acquisitions.

According to the SEC filings, LinkedIn brought in revenues of $93.9m in the first three months of this year, more than double the $44.7m in the same period in 2010. Profits rose to $2.1m from $1.8m.

Unlike Facebook, the world's dominant social network, which is expected to go public next year, LinkedIn charges many of its members for premium services, such as the ability to connect easily with potential contacts. It also makes money selling adverts on the site, and from charging recruiters who want easy access to its users.

The valuations of social networking companies and similar businesses, including Facebook, Zynga, Twitter and Groupon, have been soaring on private markets this year, as user numbers surge and advertisers target users.

News
people And here is why...
Life and Style
The new Windows 10 Start Menu
tech
News
More than 90 years of car history are coming to an end with the abolition of the paper car-tax disc
newsThis and other facts you never knew about the paper circle - completely obsolete today
Arts and Entertainment
There has been a boom in ticket sales for female comics, according to an industry survey
comedyFirst national survey reveals Britain’s comedic tastes
PROMOTED VIDEO
Arts and Entertainment
Ed Sheeran performs at his Amazon Front Row event on Tuesday 30 September
musicHe spotted PM at private gig
News
Kim Jong Un gives field guidance during his inspection of the Korean People's Army (KPA) Naval Unit 167
newsSouth Korean reports suggest rumours of a coup were unfounded
News
people'I’d rather have Fred and Rose West quote my characters on childcare'
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Hilary North's 'How My Life Has Changed', 2001
books(and not a Buzzfeed article in sight)
Arts and Entertainment
Mystery man: Ben Affleck and Rosamund Pike in '‘Gone Girl'
films... by the director David Fincher
Life and Style
stoptober... when the patch, gum and cold turkey had all failed
Travel
Bruce Chatwin's novel 'On the Black Hill' was set at The Vision Farm
travelOne of the finest one-day walks you could hope for - in Britain
Arts and Entertainment
Gay and OK: a scene from 'Pride'
filmsUS film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Trust Accountant - Kent

NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

Law Costs

Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

Day In a Page

Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

The children orphaned by Ebola...

... then rejected by surviving relatives over fear of infection
Pride: Are censors pandering to homophobia?

Are censors pandering to homophobia?

US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
The magic of roundabouts

Lords of the rings

Just who are the Roundabout Appreciation Society?
Why do we like making lists?

Notes to self: Why do we like making lists?

Well it was good enough for Ancient Egyptians and Picasso...
Hong Kong protests: A good time to open a new restaurant?

A good time to open a new restaurant in Hong Kong?

As pro-democracy demonstrators hold firm, chef Rowley Leigh, who's in the city to open a new restaurant, says you couldn't hope to meet a nicer bunch
Paris Fashion Week: Karl Lagerfeld leads a feminist riot on 'Boulevard Chanel'

Paris Fashion Week

Lagerfeld leads a feminist riot on 'Boulevard Chanel'
Bruce Chatwin's Wales: One of the finest one-day walks in Britain

Simon Calder discovers Bruce Chatwin's Wales

One of the finest one-day walks you could hope for - in Britain
10 best children's nightwear

10 best children's nightwear

Make sure the kids stay cosy on cooler autumn nights in this selection of pjs, onesies and nighties
Manchester City vs Roma: Five things we learnt from City’s draw at the Etihad

Manchester City vs Roma

Five things we learnt from City’s Champions League draw at the Etihad
Martin Hardy: Mike Ashley must act now and end the Alan Pardew reign

Trouble on the Tyne

Ashley must act now and end Pardew's reign at Newcastle, says Martin Hardy
Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

Isis an hour away from Baghdad -

and with no sign of Iraq army being able to make a successful counter-attack
Turner Prize 2014 is frustratingly timid

Turner Prize 2014 is frustratingly timid

The exhibition nods to rich and potentially brilliant ideas, but steps back
Last chance to see: Half the world’s animals have disappeared over the last 40 years

Last chance to see...

The Earth’s animal wildlife population has halved in 40 years
So here's why teenagers are always grumpy - and it's not what you think

Truth behind teens' grumpiness

Early school hours mess with their biological clocks
Why can no one stop hackers putting celebrities' private photos online?

Hacked photos: the third wave

Why can no one stop hackers putting celebrities' private photos online?