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The $800 Exit: Apple's Third Founder Quit After Twelve Days

Abstract

Apple Computer was founded on April 1, 1976, by three people: Steve Jobs, Steve Wozniak, and Ronald Wayne, who held 10%. Wayne drew Apple’s first logo, wrote the Apple I manual, and drafted the partnership agreement. Twelve days later he withdrew, selling his stake back for $800 (plus $1,500 a year later to waive future claims). At Apple’s later multi-trillion-dollar valuations, that 10% would notionally have been worth hundreds of billions, often cited as the most expensive cold feet in business history. Wayne insists it was the right call, and his reasoning was sounder than the punchline suggests.

The Adult in the Partnership

Ronald Wayne (born 1934) worked with Steve Jobs at Atari as chief draftsman (see Nolan Bushnell and Atari). Jobs brought him in as the tiebreaker and grown-up: Wayne was in his forties, the Steves in their twenties. On April 1, 1976, the three signed the partnership agreement Wayne himself typed. Jobs and Wozniak each took 45%, Wayne 10%.

In twelve days he produced Apple’s founding artifacts: the ornate first logo (a Victorian pen-and-ink engraving of Newton under the apple tree, replaced within a year by the bitten-apple mark) the Apple I operation manual, and the partnership papers.

Why He Ran

Apple was a partnership, not a corporation: every partner bore unlimited personal liability for company debts. When Jobs took on debt to fill the Byte Shop’s order for Apple I boards (a retailer notorious for paying late) Wayne did the math. Jobs and Wozniak were broke kids with nothing to lose; Wayne owned a house and had already been burned by a failed slot-machine business five years earlier. If the venture collapsed, creditors would come for the one partner with assets.

On April 12, 1976, he filed his withdrawal and took $800 for his 10%. When Apple incorporated in early 1977, he accepted about $1,500 more to renounce all claims.

The Numbers Nobody Lets Him Forget

Apple later became the first trillion-dollar US company (see Fun Fact: Apple’s First Trillion); at a $3 trillion valuation, a preserved 10% would be worth on the order of $300 billion, though no realistic history keeps a passive 10% undiluted through Apple’s financing rounds and 1980 IPO. Wayne compounded the legend by selling his original signed founding contract in the 1990s for about $500; the same document fetched $1.59 million at Sotheby’s in 2011 and resold for $2.51 million later. Wayne, living modestly in Pahrump, Nevada, on hobbies of stamps and coins, has said for decades that he made “the best decision with the information available at the time”, and that had he stayed, the stress of riding what he called “a tiger” would likely have killed him.

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