Stewart Butterfield wanted to return money to investors after his startup Glitch failed, but Accel refused, which led to its 24% stake in Slack at its IPO
Stewart Butterfield wanted to quit and give the money back to investors. They wouldn't let him. — Stewart Butterfield loved the game, but not enough people agreed with him. Tweets: @lizette_chapman and @thestalwart Tweets: Lizette Chapman / @lizette_chapman : When investors won't let you return their $. Here's how Accel turned a $200M investment in Slack into $4.6 billion https://www.bloomberg.com/... via @technology Joe Weisenthal / @thestalwart : “Accel invested about $200 million in Slack over seven years, largely driven by Braccia's unwavering faith in Butterfield. As of the stock debut, Accel held 24% of the company, the biggest VC stake in a newly public unicorn in recent history.” https://www.bloomberg.com/...
Context & Ripple Effects
The story behind Accel's Slack windfall starts with a failure: when Glitch collapsed, founder Stewart Butterfield wanted to shut down and hand the money back, but Accel refused — a governance call by partner Braccia that kept Butterfield building instead of refunding. That refusal is what produced the 24% stake Accel held at Slack's stock debut, turning roughly $200M deployed over seven years into about $4.6 billion.
The arc between those two points was fast: within months of the pivot, Butterfield was raising a $160M round at a $2.8B valuation with new backers including IVP, Horizons Ventures, Index Ventures, and DST Global, and by mid-2015 he was weighing how to spend fresh capital in a favorable fundraising climate. Four years later Slack closed its first trading day up 48.5% from its $26 reference price, valuing the company near $20B.
First-order effects
- Accel's decision converts directly into the largest single win in the story: refusing the refund preserved a 24% IPO stake worth roughly $4.6 billion on about $200M invested, validating Braccia's bet on Butterfield himself.
Second-order effects
- Butterfield's own fundraising history shows the knock-on effect — the same investor conviction that blocked the refund carried into successive rounds, drawing IVP, Horizons Ventures, Index Ventures, and DST Global into a company that had recently been a failed game studio.
Third-order effects
- If this pattern holds, venture economics tilt further toward backing founders through pivots rather than liquidating after failure — making an investor's willingness to refuse returned capital, and its read on a specific founder, a core source of fund-level returns.
The trend: Venture returns are increasingly decided at the pivot point, where an investor's choice to keep capital deployed with a proven founder outweighs the discipline of taking refunds from failed products.