Ronald Wayne, the man who sold 10% stake in Apple now worth over $95 billion for just $800 in 1976
- 1 Ronald Wayne, the man who sold 10% stake in Apple now worth over $95 billion for just $800 in 1976
- 2 Who is Ronald Wayne?
- 3 How long was Ronald Wayne with Apple?
- 4 Why did Ronald Wayne sell the 10% take in Apple for $800
- 5 $800 is $95 billion now
- 6 Wayne could have made money even from selling the contract he signed with Apple
Imagine you come to own 10% shares of an unknown company that is just starting out and hasn’t had any success. What would you do with such shares? You would definitely wait it out, right? This man sold all of it for $800 (Rs.60,000) and lived to see his 10% stake in the company is now worth $95 billion (Rs 7.2 lakh crore)! Sounds insane right. Sometimes you just don’t bother to bend to pick up the opportunities life gives you. You just don’t realize the impact of the decision you just took will have in the future.
This is what happened to Ronald Wayne.
Who is Ronald Wayne?
Ronald Wayne was one of the early backers of Apple and its co-founders Steve Jobs and Steve Wozniak. In fact, Ronald Wayne was a retired American electronics industry businessman, who co-founded Apple as a partnership with Wozniak and Jobs. In those early days, Apple hadn’t been listed and Wayne got 10 percent of Apple shares pursuant to an agreement between him, Wozniak and Jobs. Wayne’s job at Apple was to provide administrative supervision for the new venture. Wayne joined Wozniak and Jobs, who were 21 and 25 at the time, to provide the company with “adult supervision”, in exchange for a 10 percent stake in the business.
In fact, he is the one who drew up an agreement detailing what work Jobs and Wozniak would do in the new company in 1976. Most people might not know that Wayne drew Apple’s first logo, which was used for less than a year before being replaced by the one associated with the company today.
How long was Ronald Wayne with Apple?
Ronald Wayne’s association with Apple lasted just 12 days. At the end of the 12th day, Wayne sold the 10% stake in Apple he had got after the agreement back to Wozniak and Jobs for a consideration of $800.
Why did Ronald Wayne sell the 10% take in Apple for $800
Apparently he feared that Apple’s debt would fall his shoulders. Today, anyone would commit a capital crime to own 10 percent of Apple. But in those days it was different. So, let’s find out why did Wayne sell his share?
Those were heady days for Apple founders, Jobs and Wozniak who were young, exuberant, and took risks. Their risk-taking didn’t convince Wayne to stay on in Apple. It wall started when Jobs took a $15,000 loan so he could buy supplies to fulfill Apple’s first contract. The contract was with a Bay Area computer store called The Byte Shop, which had ordered around 100 computers.
The Byte Shop was famous among computer dealers for not paying up. This was the trigger that set Wayne on selling the 10 % stake in Apple. He thought that The Byte Shop would take delivery of the Apple computers and refuse to pay. If that happened the responsibility of paying back the $15,000 loan Jobs took would fall on him. This worried Wayne.
You see, Jobs and Wozniak were just in their twenties and didn’t have any investments or assets while Wayne had some including a horse. It would have been up to him to repay the $15,000 loan if The Byte Shop didn’t pay for the order. He feared the if the deal went south, the financial burden would fall on him.
He thought and thought and twelve days later, he sold his 10% share in Apple back to Jobs and Wozniak for $800. A year later, he accepted a final $1,500 to forfeit any potential future claims against the company. His total takeaway from Apple was $2,300 in 1976.
$800 is $95 billion now
If Wayne had waited just 50 years he would have been one of the top billionaires in the world with a $95 billion stake in Apple. But you can’t foresee these things. Wayne’s decision to leave the start-up cost him big because today, a 10 percent stake in Apple would be worth over $95 – $100 billion. Apple’s share price as of today on Nasdaq is $318.
Does he regret his decision? No, says Wayne. He was quoted saying, “I would wind up in the documentation department shuffling papers for the next 20 years. He told a reporter that he felt out of place at Apple like he was “standing in the shadow of intellectual giants.”
Talking about his 12-day stint with the company, he told Cult of Mac, “I was 40 and these kids were in their 20s. They were whirlwinds — it was like having a tiger by the tail. If I had stayed with Apple I probably would have wound up the richest man in the cemetery.”
Wayne could have made money even from selling the contract he signed with Apple
Ronald Wayne has one regret about his time in Apple. Wayne says he regrets not keeping his original Apple contract with him. Actually, Wayne kept his original Apple contract from 1976 for years. However, in the early 90s, he sold it for $500.
According to “The Filthy Rich Guide,” in 2011, that contract sold at auction for a whopping $1.59 million. “I had this Apple contract sitting in my filing cabinet, covered in dust and cobwebs, and I thought, ‘What do I need to hold onto that for?’” he was quoted saying.
Sometimes you just don’t bend to pick up the opportunities life presents you with!