People take pictures in front of the Snapchat headquarters in Los Angeles.

Brown met Snap CEO Evan Spiegel when he was a junior English major living in Stanford's Kimball Hall, his lawsuit says, when he "independently conceived of the idea of a mobile device application that would allow a person to transmit a picture to another mobile device user — but the picture would then automatically delete itself."

The lawsuit settlement likely refers to Reggie Brown, who sued the company in 2013 alleging that Snapchat was using his intellectual property.

While two of Snapchat's co-founders are about to become multi-billionaires , the company's IPO filing refers to a third co-founder who sued the company. Snap paid this person $157.5 million -- $50 million in 2014, and the remainder in 2015. "There are no further amounts required to be paid in the future," the filing says.

Spiegel told Brown he had conceived of a "million-dollar idea," and agreed to work together over the summer of 2011, bringing fellow co-founder and current chief technology officer Robert Murphy, the lawsuit said. The lawsuit alleges that Brown was chief marketing officer and conceived an early version of the "ghost" logo still used by Snap.

Brown fell out with Spiegel and Murphy in August 2011 — still very early days for Snapchat, which up until then was called Picaboo. It would be another year before Snap received $485,000 in seed funding from Lightspeed Venture Partners, according to Crunchbase.

Things have changed drastically, as Snap aims to raise $3 billion in an IPO that could value it at $25 billion or more.

Co-founders Evan Spiegel and Bobby Murphy each own 20 percent of Snap, according to the prospectus. After the company goes public, each of them would own shares worth at least $5 billion.

Spiegel and Murphy also each control 44 percent of the company's voting power before the offering, giving them nearly complete control over the company's future, and the shares being issued for the IPO will carry no voting rights.

Brown and his attorneys did not immediately respond to a request for comment.

Working on Snap was not a total waste for Brown. In addition to his multi-million settlement, a deposition revealed that after he graduated he was accepted to law school and worked as a clerk in the South Carolina Attorney General's office.

"Reggie is working on his first patent application so he is well on his way to being a lawyer!" Spiegel's dad texted Brown's mother while they were working on what would become Snapchat, according to the lawsuit.

You can read a detailed account of the lawsuit and Brown's claims at Business Insider.

— CNBC's Ari Levy contributed to this report.