Jay Chaudhry, CEO of Zscaler turned 70 of his employees into millionaires when he sold his first start-up.
Jay Chaudhry, an Indian-American billionaire and CEO of cloud-security firm Zscaler, is known for his remarkable journey from humble beginnings to immense success. His story isn't just about his wealth but also about the extraordinary impact he had on his employees when he sold his first start-up.
In the 1990s, Jay Chaudhry, along with his wife Jyoti, founded SecureIT, a cybersecurity company. They invested all their savings into this venture, taking a significant risk. However, their hard work paid off, and the company grew successful. What made Chaudhry stand out was his decision to share the company’s success with his employees. Thanks to the support of his investors, he was able to allocate equity—ownership shares—to his staff.
When Chaudhry decided to sell SecureIT to Verisign in 1998, the outcome was beyond what anyone could have anticipated. Not only did the sale secure Chaudhry’s future, but it also transformed the lives of his employees. Out of the 80 people working at SecureIT, 70 became millionaires through the sale. This means that a staggering 87.5% of his staff gained significant wealth, something that is rarely seen when a company changes hands.
The sale of SecureIT coincided with a surge in Verisign's stock prices, further boosting the financial gains of Chaudhry and his employees. Many of them used their newfound wealth to buy homes, cars, and even took time off to enjoy life. Chaudhry's decision to distribute equity among his employees was a way of acknowledging their hard work and dedication, as he believed that they were crucial to the company's success.
However, this prosperity wasn't without its challenges. When the dot-com bubble burst, Verisign's stock prices plummeted, and the fortunes of Chaudhry’s employees depended on when they sold their shares. Those who cashed out early enjoyed substantial gains, while those who waited faced the impact of the stock market crash.
Despite this setback, Jay Chaudhry continued to build on his success. After selling SecureIT, he went on to found four more companies—CoreHarbour, CipherTrust, AirDefence, and finally Zscaler in 2008. Zscaler, a cybersecurity firm that serves major corporations worldwide, went public in 2018 and is now listed on NASDAQ.
As of August 2024, Forbes reported Chaudhry’s net worth to be $11.3 billion (around Rs 10,000 crore). He and his family hold a 40% stake in Zscaler, underscoring his continued influence in the tech industry. Chaudhry’s journey from starting with nothing to becoming a billionaire, all while helping his employees achieve financial success, is a story of both business acumen and generosity.
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