Reddit's "Young Troll" CEO Preps For IPO, Targets $6.5 Billion Valuation

Reddit Inc. Chief Executive Officer Steve Huffman has run the site for the better part of a decade. His tenure has been marked by scandal, triumph and, most recently, a $193 million payday.

When Reddit stages its long-awaited public market debut this week, Huffman, 40, will be the face of a company that's grown up with the internet — and wrestled with many of the industry's morally vexing questions. It's a tale of maturation for both CEO and Reddit itself — which has evolved from an upstart company with little interest in making money, to one of the year's most closely watched IPOs, with a valuation targeting $6.5 billion, according to company filings.

Reddit got its start in 2005, when the world's most famous startup accelerator Y Combinator was just getting off the ground. Co-founders Huffman and Alexis Ohanian, who were roommates in college, wanted to get some funding to spend a summer working on an idea for a new business. They joined the first-ever class of Y Combinator companies, and their pitch became Reddit, a collection of forums where users could post about almost anything — from relationship advice to medical problems to refrigerator interiors.

Huffman built Reddit's first website himself in the programming language Lisp. He had started programming as a kid, and would later say that he spent his "formative years as a young troll on the Internet."

The story of Reddit as an independent company could have ended one year after it began, when it was acquired by Condé Nast. The quick sale was a testament to the site's early traction. During this period, Ohanian, now better-known as the husband of Serena Williams, left and got into the venture capital business. Huffman also departed, joining a travel site called Hipmunk. The sale was followed by several up and down years for the company.

In 2011, Advance Magazine Publishers Inc., the owner of Condé Nast, spun out Reddit as an independent business again. By this point the platform had a fiercely loyal following, and quickly attracted investments from Silicon Valley's most notable venture capital firms, as well as celebrities including Snoop Dogg and Jared Leto.

It was also a mess. In an interview last year, then CEO Yishan Wong said that during his tenure from 2012 to 2014, "the user base increased fivefold" and "we were able to cut costs and get technical costs down to avoid bankruptcy," but the job "was incredibly stressful and draining." After Wong left, Sam Altman, now CEO of OpenAI, had a stint at the helm lasting only a few days. Altman had been in the same Y Combinator class with Huffman and Ohanian, and is still a major shareholder in Reddit. Altman was followed by venture capitalist Ellen Pao, who took over as interim CEO.

Reddit users openly revolted against her leadership, posting racist "Chairman Pao" memes akin to Maoist propaganda, among other insults and threats. She left in 2015.

The rapid CEO turnover and volatile users vexed investors and management alike. "We just needed leadership that could lead a company and the community together," said Alfred Lin of Sequoia Capital, which invested in Reddit in 2014.

The answer turned out to be Huffman. The executive was the board's "benchmark candidate — he has exactly the combination of talent and vision we were looking for," Altman, then a board member, wrote in a post on Reddit at the time.

"We had a lot of conviction when we picked Steve," Lin said. "We needed the moral authority of a founder to lead the company from where it was."

Huffman re-joined when Reddit was still small, about 50 employees. Melissa Tidwell, the company's former general counsel, said she remembers his first day in the office. "He was literally rolling his chair around and saying, 'Hey, I'm Steve. What's your name?'" He seemed like "just a normal person."

Tidwell recalled a company offsite gathering in 2018 Huffman orchestrated and performed Michael Jackson's "Thriller" as part of a flash mob. "He has good days, he has bad days," she said. "He's goofy, he's kind of a smartass, he's a little bit of a troll, but he was never above anybody else."

Huffman's transition to the top job was not always smooth. About a year after his return, the CEO secretly edited user comments that were critical of him. He apologized after users realized their words had been edited. "I f---ed up. I ruined Thanksgiving. I'm sorry. I won't do it again," he said in a post on the site.

He said he thought he "might find some common ground with that community by meeting them on their level." He added: "It did not go as planned."

Huffman explained that he was a Reddit user and had succumbed to some of the platform's baser tendencies, in addition to being the CEO of a major corporation. In addition to growing up as a "young troll on the internet," he wrote in the apology, "I also led the team that built Reddit 10 years ago, and spent years moderating the original Reddit communities, so I am as comfortable online as anyone."

Initially, Huffman was hesitant to turn Reddit into a profit-generating business. In a post on the site shortly after he became CEO he said that "monetization isn't a short-term concern of ours." In its IPO paperwork, the company said it did not begin figuring out how to make money off the platform in earnest until 2018.

"Every young CEO does need to grow up themselves, but a company has to grow up," Lin said. "He went through some challenges and those challenges are, I think, what defines good CEOs."

Now that Reddit is aiming to narrow its losses and generate value as a public company, it's still an open question how users will react.

In 2020, after years of criticism over the toxicity of some content on the platform, Huffman instituted Reddit's hate speech policy, a nod to advertisers that the platform could be a safe space to spend money. And last year, after a number of forums on the site protested its decision to increase prices for third-party app developers, Reddit stood its ground on the change, arguing that the company "needs to be fairly paid." Meanwhile, Huffman himself was awarded a $193 million pay package in 2023, according to filings, and has a 3.3% stake in the company.

Jessica Livingston, co-founder of Y Combinator, has known Huffman since he was a senior in college. Since then, he's "definitely been through ups and downs with Reddit," she said. "It wasn't all easy."

There were multiple times that users lashed out against Huffman, sometimes personally. "This job is much, much harder to do because of such an active community that pushes back on the company, and I think he's done an extraordinary job navigating that," said Lin, the investor. "It's probably more unique to Reddit than almost any other technology company."

Huffman has also been a defender of those users. When WallStreetBets roiled the markets in 2021, he took to the audio app Clubhouse to praise the community's ability to band together and execute complex transactions. "I would say if you go to WallStreetBets, and you think, 'What a bunch of idiots,' I would challenge you to spend a little bit more time there and appreciate the facets of that community that make it a real community."

For years, he said he wanted Reddit users, who have a sense of ownership over the social media site's community, to become owners of the company itself. In the company's IPO, he's fulfilling that promise, setting aside about 8% of shares for Reddit's top users.

Livingston said she's been amazed by Reddit's long and eventful path from early Y Combinator company to IPO almost two decades later — several lifetimes in the world of startups.

"For me, it's really special that Steve is back," Livingston said. "It's not super common to have a startup go on forever and truly be someone's life's work." At a company famous for chewing up its leadership, Huffman has endured. Says Livingston: "I think he's in it for the long haul."