YouTube Founders' 2006 650M Sale vs. 550B Valuation Now Highlight Missed Opportunity

The sale of YouTube to Google in 2006 for $1.65 billion marked a pivotal moment in the company’s history, though its co-founders, Chad Hurley and Steven Chen, may have later questioned the decision. At the time, the founders received stock worth approximately $650 million combined, according to a 2025 report [1]. However, with YouTube’s current valuation estimated at $550 billion, the founders’ initial shares could have been worth significantly more had they retained them. This discrepancy underscores the trade-offs between liquidity and long-term equity gains in major corporate exits [1].

The transaction, finalized in October 2006, granted Google control over the rapidly growing video-sharing platform. Hurley and Chen, who stepped down from active roles shortly after the sale, opted to cash out their holdings rather than hold out for potential future gains. At the time, the $1.65 billion price tag was considered a windfall for the startup, which had been founded just two years earlier. However, the company’s exponential growth—driven by Google’s infrastructure, advertising strategies, and YouTube’s role as a digital media powerhouse—has since turned it into one of the most valuable assets in tech.

The founders’ decision to sell reflects common challenges in startup exits: balancing immediate financial security with the uncertainty of holding onto a high-growth company. While Hurley and Chen’s shares provided substantial wealth, the opportunity cost of not retaining a larger stake is striking. If their original equity had retained its proportion of YouTube’s current valuation, their personal holdings could have approached multi-billion-dollar figures. This scenario highlights the risks and rewards of early-stage entrepreneurship, where timing and strategic choices can dramatically alter outcomes.

The 2006 sale also raises questions about valuation dynamics in the tech industry. Google’s acquisition of YouTube was a strategic move to capture a dominant position in online video, a market that has since exploded with user-generated content and paid streaming services. By 2025, YouTube generates billions in annual revenue, with its ad-supported model and YouTube Premium subscriptions contributing to Google’s broader ecosystem. The platform’s evolution—from a niche video service to a global entertainment and commerce hub—has been central to its valuation surge [1].

While the founders’ post-sale paths diverged—Hurley later co-founded Jaunt VR, a virtual reality company, and Chen pursued investments—their YouTube windfalls remain a subject of retrospection. The case illustrates the importance of equity management and long-term value retention in tech exits. For investors and entrepreneurs, it serves as a cautionary tale about the trade-offs between immediate liquidity and the potential for compounding gains over time [1].

Sources:

[1] [YouTube's founders split over $650 million when they sold to Google in 2006—had they held out, they could have taken a slice of $550 billion](https://fortune.com/2025/07/25/youtube-cofounders-chad-hurley-steven-chen-sold-google-net-millions-but-now-worth-over-500-billion/)