If one day tires of cinema, Michael Lynton, CEO of Sony Entertainment, has another career awaiting him in an even more risky field: investments in the Internet sector.
Unbeknownst to those following the frenzy sparked by buzzing tech start-up Snapchat, the company counts the studio chief as one of its earliest investors, according to people familiar with the deal. Snapchat is widely seen as on the verge of several scenarios that could see its value skyrocket, after declining a recent multi-billion dollar takeover offer from Facebook.
While Lynton’s ties to the Los Angeles-based photo messaging service became evident in June when he joined the company’s board of directors, what was not disclosed was an investment he and his wife, Jamie, had made in the business, estimated at around $ 200,000.
A representative for Lynton declined to comment. Representatives for Snapchat did not respond to the request at the time of posting.
An SEC filing released Wednesday confirmed Lynton’s status on the board but did not identify his status as an investor.
This investment took place in early 2012, ahead of several rounds of funding that injected over $ 100 million into Snapchat from various venture capital firms including Benchmark Capital, Lightspeed Ventures, and IVP. Snapchat reportedly received $ 50 million in Series C funding on Thursday from another company, Coatue Management.
Arguably the hottest internet company around, Snapchat has become a phenomenon among tens of millions of teens, mostly teenagers, who use the service to send each other photos or videos that disappear shortly thereafter. have been viewed via mobile devices. Partially clothed “selfies” are a common release.
Adding to the sensation around Snapchat is that its founders are barely out of their teens themselves: Stanford U. graduates Evan Spiegel, 23, and Bobby Murphy, 25, as Facebook, Snapchat has also been involved in a lawsuit brought by another person who claims they stole his idea for the business.
Better known as a fundraiser for President Obama than a tech pioneer, Jamie Lynton actually spurred the investment, people familiar with the deal said. She was moved to contact Spiegel after seeing how her children were drawn to Snapchat. The Lyntons are said to have drawn close to Spiegel, serving in an advisory capacity and making introductions to the entertainment industry, which could come to see Snapchat as a promotional platform although the company’s monetization strategy is currently a mystery.
Oddly enough, Snapchat is believed to be the only investment Lynton has made among internet startups, unlike many other tech-savvy moguls who place bets on multiple companies in the industry in the hope of a healthy return on their investment. . Snapchat is also the only Lynton business board that Lynton is currently known for.
It’s unclear how big a stake is for Lynton in Snapchat. While $ 200,000 might not seem like a big sum in the billions that some tech companies are valued at, even a modest investment can generate an astronomical return depending on a company’s endgame. Like Facebook and Twitter, Snapchat could go the IPO route, but Lynton’s windfall could also be triggered by a sale. Other companies are rumored to have laid off Snapchat tires, including Google and Chinese giant Tencent.
Of course, Lynton still has a day job to keep him busy. He took over as CEO of Sony in April, before a tough summer at the box office that drew criticism from activist investor Daniel Loeb. Last month, Sony pledged to bring in Bain & Co. to advise on cuts of $ 250 million to impose more tax discipline on the studio.
Sony itself has no known business relationship with Snapchat.