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Interestingly not a huge exit its "just" 3x. (Edited from 6x I looked at investment not valuation originally) For all the news around Jet taking on Amazon I'm n

Interestingly not a huge exit its "just" 3x. (Edited from 6x I looked at investment not valuation originally) For all the news around Jet taking on Amazon I'm not sure this is signaling a win for them.

a_small_island 10y ago
$500M invested, previous valuation ~$1B, so a "3x" exit.
- mikeryan 10y ago
  Right just realized that
- deleted 10y ago
  [deleted]
- cfield 10y ago
  It looks like the $1B figure is a pre-money valuation for the $500M raised.[0] If so, that results in a 2x exit for those investors.[1] This assumes those investors don't have rights that would entitle them to more than their pro rata of the acquisition proceeds, such as special liquidation preference rights that would entitle them to more than a 1x liquidation preference. It's these kinds of special liquidation preference rights that have attracted some attention for helping "juice" valuations, particularly with unicorns.[2] ----- [0] https://www.crunchbase.com/funding-round/79d35bb376dcc222a8a441cd1ab6cf0b https://www.crunchbase.com/funding-round/79d35bb376dcc222a8a... [1] Math: $500M invested at $1B results in those investors owning 1/3 of the company. Assuming pro rata distribution of the acquisition proceeds, they would get $1B in a $3B acquisition. [2] http://www.bloomberg.com/news/articles/2015-03-17/the-fuzzy-insane-math-that-s-creating-so-many-billion-dollar-tech-companies http://www.bloomberg.com/news/articles/2015-03-17/the-fuzzy-...
  - mbesto 10y ago
    According to pitchbook, Jet raised their latest round of $350M ($565M total) at a $1.05B pre and a $1.4B post.
    - cfield 10y ago
      Got it. With those numbers, the returns are ~1.86x for the investors of the $565M. ($3B * ($565M/$1615M) / $565M).
blahi 10y ago
For two years?
- mikeryan 10y ago
  Nobody puts in that kind of money for a 3x return regardless of time window its not like the VCs can put the money back into something else. Decent article on this from Fred Wilson http://avc.com/2009/03/what-is-a-good-venture-return/ http://avc.com/2009/03/what-is-a-good-venture-return/
  - cm2187 10y ago
    Does that mean that these VC are really concerned about the market turning and would rather do "only" 3x than stay invested?
    - mikeryan 10y ago
      Thats my read. Really any lower then that and its a firesale which sends a horrible message.
  - blahi 10y ago
    You assume that all investors follow the same profile for all of their investments. This is a company which was all but guaranteed to succeed and sell in <3 years for billions.

a_small_island 10y ago

$500M invested, previous valuation ~$1B, so a "3x" exit.

mikeryan 10y ago
Right just realized that
deleted 10y ago
[deleted]
cfield 10y ago
It looks like the $1B figure is a pre-money valuation for the $500M raised.[0] If so, that results in a 2x exit for those investors.[1] This assumes those investors don't have rights that would entitle them to more than their pro rata of the acquisition proceeds, such as special liquidation preference rights that would entitle them to more than a 1x liquidation preference. It's these kinds of special liquidation preference rights that have attracted some attention for helping "juice" valuations, particularly with unicorns.[2] ----- [0] https://www.crunchbase.com/funding-round/79d35bb376dcc222a8a441cd1ab6cf0b https://www.crunchbase.com/funding-round/79d35bb376dcc222a8a... [1] Math: $500M invested at $1B results in those investors owning 1/3 of the company. Assuming pro rata distribution of the acquisition proceeds, they would get $1B in a $3B acquisition. [2] http://www.bloomberg.com/news/articles/2015-03-17/the-fuzzy-insane-math-that-s-creating-so-many-billion-dollar-tech-companies http://www.bloomberg.com/news/articles/2015-03-17/the-fuzzy-...
- mbesto 10y ago
  According to pitchbook, Jet raised their latest round of $350M ($565M total) at a $1.05B pre and a $1.4B post.
  - cfield 10y ago
    Got it. With those numbers, the returns are ~1.86x for the investors of the $565M. ($3B * ($565M/$1615M) / $565M).

blahi 10y ago

For two years?

mikeryan 10y ago
Nobody puts in that kind of money for a 3x return regardless of time window its not like the VCs can put the money back into something else. Decent article on this from Fred Wilson http://avc.com/2009/03/what-is-a-good-venture-return/ http://avc.com/2009/03/what-is-a-good-venture-return/
- cm2187 10y ago
  Does that mean that these VC are really concerned about the market turning and would rather do "only" 3x than stay invested?
  - mikeryan 10y ago
    Thats my read. Really any lower then that and its a firesale which sends a horrible message.
- blahi 10y ago
  You assume that all investors follow the same profile for all of their investments. This is a company which was all but guaranteed to succeed and sell in <3 years for billions.