$111M exit on $35M. Seems meh for seven years effort. Were prospects cloudy? Better return over seven years for most employees (possibly even founders) working up through a FAANG. I’m sure YC did great, of course.
This means that the vc money requires 7-9% per year payback on liquidity event until any other equity gets any money.
This means you're likely subtracting 1-3 million per year from other equity holders based on $35mn raised
You could say that about 99.9(9?)% of startup exits.
In terms of investor return, I think it's healthy to have some exits like this. A bunch of the money was only in for 2 years, and probably doubled their investment in that time. The rest of the investors got their money back, with something close to NASDAQ returns on top of it. If this was the baseline for the fund instead of going to zero, you wouldn't need unicorns and the questionable growth tactics that go with them.
If founders had 25%, they got "retirement with reasonable luxuries" or "gunpowder to play investor" money of double digit $millions.
If 20-25 employees split an option pool of 15%, it's close to replacing the FAANG opportunity cost.
So totally agree that it's a bit of a "meh" outcome in comparison to financial alternatives, and the pie splitting matters a lot. But it didn't go to zero, and everyone is within a stone's throw of their stock market / FAANG hurdle rates (and it's not like that FAANG career is guaranteed for people who thrive better at startups). And the stories and experiences are a hell of a lot better.
I think exit is timely because there's the dire possibility of fading AI/LLM hype that's where GPU demand would fall off the cliff not only on the server side but also that many devices might have better inference hardware.
Does that mean they have/had lots of hardware investment? Or do they "just" offer a management layer based on other clouds?