Instagram's founders
Instagram's founders

Kevin Systrom (pictured) and Mike Krieger struck gold when they recently sold their 2-year-old photo sharing startup to Facebook in a cash-and-stock deal valued at $1 billion. It was Facebook's biggest acquisition to date -- and the kind of windfall Silicon Valley startups dream about. The deal has grown richer in the five weeks since it was announced: The Instagram crew took home $300 million cash and almost 23 million Facebook shares, a stock stash now worth $874 million. That takes the Instagram deal's value up to almost $1.2 billion.

Systrom and Krieger originally set out to build a Foursquare-like check-in service called Burbn. They "pivoted" toward photo sharing after discovering that's what their users were flocking toward. Instagram attracted 30 million users before Facebook snapped it up.


Source: Facebook SEC filings and CNNMoney reporting. All stakes are based on pre-IPO holdings, calculated at $38 per share.
By Laurie Segall and Stacy Cowley @CNNMoneyTech - Last updated May 18 2012: 2:59 PM ET
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$38 is the magic number

Facebook's IPO will raise $16 billion, making it the third-largest IPO in U.S. history.

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