Reid Hoffman, the entrepreneur who founded LinkedIn eight years ago, will have a paper worth of more than $600m (£368m) when the professional networking website floats on the New York Stock Exchange later this month.
Bankers put a value on Mr Hoffman's 20% stake in the company for the first time yesterday, setting a range within which LinkedIn will sell up to nine million shares in an initial public offering.
The share sale will value the whole company at up to $3.35bn (£2bn), significantly higher than the range expected when LinkedIn first filed IPO documents in January. The increase reflects soaring revenues at the company, and soaring investor interest in social networking businesses - most of which still remain private, with hard-to-buy shares.
California-born Mr Hoffman (43) is an alumnus of the management of PayPal, whose sale to eBay in 2002 made millionaires of several Silicon Valley investors and entrepreneurs. He has since become one of the tech industry's prominent angel investors, funding dozens of technology start-ups, including Zynga, the developer behind the Facebook game Farmville. Mr Hoffman founded LinkedIn in 2003 and has overseen its growth into a major professional networking organisation with more than 100 million members in more than 200 countries.
He still chairs the board, but has handed day-to-day management to Jeffrey Weiner, a former Yahoo executive. Both men will sell $4m (£2.5m) of shares in the IPO, according to updated regulatory filings lodged with the US Securities and Exchange Commission yesterday.
Mr Weiner's stake in LinkedIn will be worth $81m (£50m) if the company's shares price at the top of the $35 (£21) range. The share sale is being underwritten by a consortium of banks, which are expected to finalise the sale price on May 18.
As well as many of the senior executive team, early investors including Goldman Sachs, Bain Capital and publisher McGraw-Hill are selling shares. More than half on offer are new shares, however, which the company says will be used to expand the business, perhaps by acquisitions.
According to the SEC filings, LinkedIn brought in revenues of $93.9m (£58m) in the first three months of this year, more than double the $44.7m (£27m) in the same period in 2010. Profits rose to $2.1m (£1.2m) from $1.8m (£1m).
Unlike Facebook, which is expected to go public next year, LinkedIn charges many of its members for premium services, such as the ability to connect easily with potential contacts.
It also makes money selling adverts on the site, and from charging recruiters who want easy access to its users.
The valuations of social networking companies and similar businesses, including Facebook, Zynga, Twitter and Groupon, have been soaring on private markets this year, as user numbers surge.