Former AOL CEO to cash in on Zipcar IPO

Former AOL CEO Steve Case will likely reap a sizeable reward from the proposed $75 million initial public offering of Zipcar, which was announced last week, documents show.

Case, the former CEO of AOL and chairman of Time Warner, stands to earn a bit more when Zipcar’s shares become public. Case’s Revolution, a venture firm he founded in 2005, owns 23% of Zipcar’s pre-IPO shares, according to documents filed with the Securities and Exchange Commission.

Zipcar, a company that rents automobiles by the hour in major metropolitan areas, is one of 14 companies Revolution counts in its portfolio.

The firm has had a busy start to 2010, investing in three companies so far this year, records show. Case and his team backed TweetUp, a company that charges for promoting the posts of Twitter users; Hungry Machine, which does business as and sells coupons to users; and Vinfolio, an online wine retailer.

At least two venture firms stand to profit from the Zipcar IPO if it goes through. Both Benchmark Capital and Greylock Partners own significant shares of Zipcar, documents show. Benchmark owns 12.6% of the pre-IPO shares and Greylock owns 7.1 percent. Zipcar had raised $38.8 million in venture funding, records show. It plans to trade on the Nasdaq exchnage under the symbol ZIP.

Other venture investors hold smaller amounts. Globespan Capital Partners, for example, owns less than 5% of Zipcar’s outstanding shares. The firm’s stake was diluted after Zipcar acquired Flexcar in November 2007, offering Series F shares worth $45 million to the investors in Flexcar.

Case’s Revolution was one of the major Flexcar shareholders and subsequently became a major Zipcar shareholder.

Zipcar counts some 400,000 people as customers and has managed to grow its revenue to $131.2 million in 2009, up from $13.7 million in 2005. The company has yet to turn a profit, collecting a combined deficit of $51.7 million. —Alexander Haislip

This story erroneously reported that John F. Kennedy Jr., the son of former president John F. Kennedy, stood benefit from the offering. John F. Kennedy Jr. is, in fact a Managing Director of New Day Capital, LLC, a private investment and consulting firm.