·2 min read
IPO outcomes: float, fees, and founder paper wealth
Model how public float and underwriting fees affect founder paper wealth at IPO, with a worked example.
TL;DR outcome
- A 20% float reduces founder ownership from 25% to 20% post-IPO.
- At a $1.2B IPO, founders hold roughly $240M in paper wealth (before lockup and taxes).
- Underwriting fees mainly affect cash proceeds, not founder paper wealth.
The situation
You are preparing for an IPO and want a quick reality check: how much founder wealth and company cash actually result after float and fees?
Inputs that matter (and which ones do not)
Matters most
- IPO valuation.
- Public float percentage.
- Founder ownership prior to IPO.
Does not matter here
- Secondary sales or lockup expirations (modeled separately).
Interactive model
Interactive model loads in the browser. Enable JavaScript to run the calculator.
Breakpoints / inflection points
The breakpoints table shows the IPO valuation needed to cross $100M and $1B in founder paper wealth given the current float and ownership assumptions.
Worked example (numbers)
| Step | Value |
|---|---|
| IPO valuation | $1,200,000,000 |
| Float | 20% |
| Founder ownership pre-IPO | 25% |
| Founder ownership post-IPO | 20% |
| Founder paper wealth | $240,000,000 |
What changes if...
- Float increases: a 30% float drops founder paper wealth by ~25%.
- Ownership is higher: every 5 points of founder ownership adds $60M at a $1.2B IPO.
- Valuation rises: paper wealth scales linearly with valuation.
Common mistakes
- Confusing cash proceeds with paper wealth.
- Forgetting float dilution in post-IPO ownership math.
- Ignoring lockup timing when comparing to liquidation events.
Checklist / next steps
- Confirm float targets with your underwriters.
- Stress-test 15%, 20%, and 30% float scenarios.
- Use the IPO Calculator to model lockup timing and fee sensitivity.
References
Last updated
- 2026-01-23: initial publication with standard and higher float scenarios.