Say Apple and two names come to mind: Steve Jobs and Steve Wozniak. Yet the founding agreement signed on April 1, 1976 carried a third signature. Ronald Wayne owned 10 percent of the company. Twelve days later he handed that entire stake back for $800.
Today this decision is usually told as "the worst investment decision in history". But once you look at Wayne's own reasons, the picture shifts a little. In April 1976 Apple was a tiny, newly founded venture, and nobody could know it would one day become one of the most valuable companies in the world. Wikipedia also notes that Apple at one point became the most valuable company in the world.
A 41-year-old next to two young guys
Ronald Wayne was born on May 17, 1934 in Cleveland, Ohio. At Atari he first worked as a junior designer, set up documentation and materials control systems, and then became a product development manager. That's where he met Jobs and Wozniak.
When Apple was founded Wayne was 41, far more experienced than his two partners. The split of shares was designed accordingly: if a dispute arose between Jobs and Wozniak, Wayne's 10 percent stake would decide the matter. In other words, he was designed to be the company's "referee". In this first form the company was not a corporation but a three-person partnership. As we'll see shortly, this detail was decisive in Wayne's decision.
The marks he left on Apple
Wayne's time at Apple was short, but not empty. According to Wikipedia, he drafted the partnership agreement, made the first sketches of the Apple logo and wrote the Apple I manual.
So Apple's first "official" face, its first logo and its first manual, largely came from his hand.
The decision 12 days later
Twelve days after preparing the agreement, Wayne filed the paperwork announcing his withdrawal from the company. He received $800 for his stake. Later he was paid another $1,500 in exchange for giving up all future claims. Wikipedia notes that, in 2024 dollars, these amounts come to roughly $4,400 and $8,300 respectively.
Why? Wikipedia lists several reasons. Wayne had earlier started a slot machine business, and when it collapsed he spent a year working to pay off his debts. The $15,000 loan Jobs took out for the Byte Shop order made him uneasy. In the partnership structure each partner was personally liable for the company's debts, and Wayne had far more personal assets to lose than his young partners. And his real passion was product engineering, not paperwork. In his own words he stood "in the shadow of giants".
Put these reasons side by side and the decision becomes easier to understand. An engineer in his forties who had already carried the burden of a bankruptcy once, and who had savings, didn't want to share a major credit risk with two young men. Looking back it seems like a bad calculation, but with the knowledge of that day it was a cautious decision.
| 1976 | Afterwards |
|---|---|
| 10 percent stake | $800, then $1,500 |
| Author of the founding agreement | The agreement sold for $1.59 million in 2011 |
| The company's "referee" | A footnote in Apple's history |
"The richest man in the cemetery"
Interestingly, Wayne's real regret isn't the stake. According to Wikipedia, he sold his own signed copy of the agreement for $500, and he has described that as his only regret.
As for giving up the stake, he says he doesn't regret it. He thinks that had he stayed, he would probably have become "the richest man in the cemetery". His original words: "probably would have wound up the richest man in the cemetery."
That's why the calculations circulating online about what the 10 percent would be worth today, in so many billions of dollars, should be treated with caution. New investors came into the company over the years, it went public in 1980, and the ownership structure changed completely. Nobody can know for sure how much Wayne's share would have been diluted had he stayed.
If you were in Wayne's shoes, would you have taken the debt risk and stayed, or would you have taken the $800 and chosen peace of mind too?