How NVIDIA Co-Founder Jensen Huang Bought 20% Of The Company For Just $200

The ubiquity of digital payments has meant that most people now walk around with barely any cash in their pockets, but having some cash on him paid off some very handsome dividends for NVIDIA CEO Jensen Huang.

NVIDIA CEO Jensen Huang had purchased 20% of NVIDIA for just $200 because that was the amount of cash in his pocket when the company was being incorporated. NVIDIA has just became the world’s 9th company to touch a $1 trillion market cap. Jensen still owns 3.6 percent of NVIDIA, which means that the initial $200 in his pocket is now worth a cool $36 billion.

NVIDIA had been founded in 1993 by Jensen Huang, Chris Malachowsky and Curtis Preim, three engineers who believed that graphics-based computing could end up being the future of how computers worked. The trio met at a Denny’s roadside cafe in San Jose and decided to set up a company. But the engineers weren’t sure of how to go about starting a new business.

“At that time, I was reading books about how to start companies, and I was trying to figure out how to go raise money, what’s a venture capitalist, and how do you incorporate the company, and those kind of things,” NVIDIA CEO Jensen Huang later said at a talk at Stanford. Huang decided that they’d need external help to incorporate the business. “I went to a law firm and met a lawyer,” he says.

The lawyer agreed to help them. “We need some money from you so that we could price the shares, and also to incorporate the company,” the lawyer told him. “How much money do you have in your pocket?” he asked Huang.

As luck would have it, Huang happened to have $200 on him. “I gave him the $200. For $200, I bought 20 percent of NVIDIA,” he says. “It was a good deal,” he laughs. He then went to his two other cofounders as well, and they too got 20 percent of the company for $200 each. “Don’t complicate things (before starting a company),” Jensen says. “I never even finished my business plan,” he adds.

The initial valuation of NVIDIA might have been determined by the amount of cash the CEO was carrying with him when the company was incorporated, and the company might have never had a business plan, but it’s managed to do pretty well for itself. NVIDIA is now worth $1 trillion (Rs. 80 lakh crore), and Jensen, who still has a 3.6 percent stake, is worth $36 billion (Rs. 2.8 lakh crore). NVIDIA is now occupying rarified space — only Apple, Microsoft, Saudi Aramco, Alphabet, Amazon, Tesla and Meta have ever previously reached the trillion-dollar milestone. And it all started when three engineers had an idea — and $200 each.