Union Square gets 5,000% return on Tumblr
crainsnewyork.com
crainsnewyork.com
But I've found the privco data reliable (but I'm a client), so I respectfully disagree with just throwing out ad-hominem attacks. So they called out your bad bed on Foursquare. (Foursquare was just forced to borrow $41 Million and even you blogged it would be massively dilutive. PrivCo said forusquare will be out of business by year's end absent raising "massively dilutive" funding.
So I respect you, I respect PrivCo from my working with their remarkably accurate data. You shouldn't take it personally, congrats on today, and if there's something we should all know and you DIDN'T do that well, well I guess tell us. If you did even better, tell all of us on HN and even more kudos! Just don't throw out attacks though something's "wrong" when it can be wrong by a penny or by alot and either way you're technically not lying...it's beneath you and USV and us VCs, c'mon you're better than that.)
Again hats off if you did even close to what's been reported on your Tumblr preferreds.
Disclaimer: I don't need, nor am I looking for any kind of funding. These are sincere words.
Probably non-existent at the PE stage.
It also varies within firms -- it's down to the individual partner -- but the overall firm matters too (or else "your" partner gets blocked on doing helpful things).
The best strategy, IMO, is to get an early investor on your side who shares a lot of the same goals (e.g. YC), and then work with the early investor to find later stage investors who are compatible.
(There's one specific firm and one specific partner I really like, but I haven't taken investment from them, so I'm reluctant to name. I get better advice from him/them already than I'd expect from an actual investor, though.)
For my part I have an mental list of both vc's I'd love to work with again, and VC's I not only will never, ever take anything from again even if it's just a free pen, and while I won't badmouth them publicly, there are certainly some I like to think I will slide just a little bit quicker into obscurity thanks to the odd situations where their name might have come up in conversation..
My advice to everyone looking for people like Fred is to reach out to other entrepreneur's and see who has really been helpful, follow them on their blogs or twitter, and try and figure out what they are about. If you like what you see, engage them and the community of people around them. Maybe you will never get to work with them directly, but in the process most likely you will connect with other like minded individuals and will find people who are either in the same position as you or sages who have done it multiple times before. Maybe you will get lucky and find a few life long friends. And that is what makes it all worth it, isn't it?
He's like the Scoble of VCs (in a good way!). :)
You're a SiliconValleyVC whose submission history is 2 privco articles. And your comment history references PrivCo multiple times and your love of them.
So perhaps you're just a really really happy VC client of a data tool or more likely you are here at the behest of your employer/are with the company and trying to salvage what must be a very bad day at the office - data company whose data gets called garbage.
On to your points to Fred:
1. If you've seen the docs, share them.
2. There was no ad-hominem attack. Fred called your data b.s. He has the #s so is in a good position to make that claim.
I can understand you're trying to save face for Privco after respected VC's Fred Wilson, Bijan Sabet have called you out. Plus, today, editors of 3 major tech publications called you out -- Jay Yarrow of Biz Insider, Eric Eldon of TechCrunch and Mike Isaac at AllThingsD all said Privco data and claims are incorrect and hyperbolic.
Pls don't insult us here with this very sad attempt at covering for your employer/company.
SelfDescribedVC: that's false.
PeanutGalleryPaparazzo: those sources have been reliable, if they're wrong, don't throw out ad-hominem attacks, just tell me how much you really made.
b*h please. Professional VCs don't anonymously troll top VCs.
(Account created 42 days ago, 2 submissions, both referencing PrivCo)
If the initial $400k bought 10% of the company, USV would need to buy 10% of each subsequent round to maintain their ownership, which would be ~$12.5M. That's ignoring varying definitions of pro rata rights, other dilution but probably a good lower bound.
If the initial $400k bought 20% (more likely for Tumblr in 2007), USV invested ~$25M to keep their ownership stake.
Fred seems like the kind of guy who always does his pro rata, so I'd imagine those numbers are closer to reality.
Anyone with a basic understanding of math ought to recognize that their numbers are dubious. It's disappointing to see it echoed all over the web including publications like Time who should be expected to do some simple fact checking.
$286 mn: USV
$231 mn: Spark Capital
$253 mn: David Karp
$176 mn: Sequoia
$88 mn: Greylock, Insight Ventures, DFJ
$66 mn: Employees (6% of the 1,100 mn)
The math adds up to 71% of Tumblr being owned by VCs. Also Bloomberg reported that David Karp asked for as much stock as Yahoo would give him, because he sees himself working on Tumblr for the next few decades. It also reflects the sentiment that Marco Arment's blogpost yesterday expressed.
“This is something I’ve been building for the last seven years and hope employs me 30 years from now."
However, they might want a prostate screening. Indeed, as I recall, Andy Grove did.
I don't trust them at all.
Privco were the same guys who did the LivingSocial hatchet job a while ago which was proven inaccurate. Privco's MO seems to be wild claims to generate interest in their private company data.
It seems even major publications think Privco's claims and data are not very good. Here's a tweet from TechCrunch and AllThings D editors questioning the integrity of the company and their data - https://twitter.com/MikeIsaac/status/336949975634296833
For those interested, I have found VCExperts data to be better for this type of shareholding info (not affiliated with the company) and definitely less sensationalist.
Unrelated to Privco, a big congrats to USV - disciplined, open and truly thesis driven - not just chasing what is the hot thing of the moment.
This isn't just a 50x return on $5m cash/a good investment/ripe market/competent founder. It's a return on USV's approach to business: being open on their investment strategy and theories, having and voicing an opinion, and appreciating the tech as much as the business metrics.
So essentially the things that made the company "magic" will no longer be fully invested in it's future success. And the new hires won't have the lure of making loads of money either since there won't be any future payday to wish for.
No mention of what they got.
Is it usual to announce these numbers for all employees with acquisitions like this?
Whether you trust it or not is up to you.
Which in turn got them from a company called PrivCo: http://www.privco.com/
Who knows how accurate they are.
Interesting to keep in mind for anyone working for a startup as a metric.
You work and have a chance, if the idea hits (to the tune of 1 billion) of making low to mid 6 figures.
$371k is certainly nice but considering the amount of startups that not only don't succeed but don't succeed to the extent that Tumblr did ...
It isn't necessarily a great deal either though. Somebody making market salary at a startup in one of the most expensive cities in the world may very well be saving less than somebody grossing a considerable amount less in a less expensive area, and after taxes that $371,000 bonus isn't a whole lot more than the base salary for a first year associate attorney at a major law firm in New York.
So while I wouldn't call the outcome here disappointing for anybody involved, I think it does highlight the generally poor economics of equity for startup employees: even when your company hits a grand slam, the windfall is rarely a short cut to the type of wealth that is frequently achieved by starting a successful small business or going into a lucrative profession.
For one thing, software engineering is a lucrative profession. It pays more than most other white collar jobs in New York, except some law, some finance, and some consultants. But it is certainly better than the large swaths of people in marketing, HR, PR, accounting, etc.
The choice of city vs not city is completely independent of the startup vs non-startup thing.
If you are intent solely on maximizing cash in your pocket, then I doubt startups are the best path. If you want that, just go work on wall street. I grew up around that, and I've known for a long time that no matter how much money there is in it, it's not a great life.
So they get a one-time mid-level banking bonus, and now they work for a completely different company and almost certainly in positions lower than what they used to have.
VCs would quit given year-end bonuses like that.